What does Finance involve.

Authors Avatar

Business studies coursework- part 5

FINANCE

Finance: involves discipline concerned with determining value and making decisions. The finance function allocates resources, including the acquiring, investing, and managing of resources.

Finance is to do with all the money matters connected to my business, it is mainly associated with your assets and it includes the management of the incoming cash in my business. So far I have made several decisions about the main business idea, market research to tell me what the customers what, marketing to get my voice to the public, human resource to employee my staff members and now in this part of the casework I am going to look at how I will gather the money I need to start up my business. Looking in to start-up costs, fixed cost and variable costs to find out what my break- even point is where I am not making a lose or a profit in my business.

Finance deals with matters related to money and the markets. In this part of the coursework, I will be calculating all the start up costs, fixed costs and variable costs (I will be explaining more about these cost below) for my business and finding out different ways in witch I can finance my money to meet my requirements of the start up costs. I will need to make sure I have the appropriate stock and service in my business as well as high quality of equipments. Financing my business will help me meet my costs and it will tell me my break even point which is very important for my business. This point will tell me how much products/ services I need to provide each day to make sure my business does not go into a lost. Using this part I will know if I need to advertise my business further more to attract customers or if I need to make my prices go up/down accounting to the amount of profit I make as I will be finding out how much profit I am expected to make. This is an important part of my business because I will need to check on all the money I am spending and if I am not going over board with the cash flow.

There are three main costs which my business will have, and then these three main costs are sub divided in to smaller costs. Below I will summaries how this works:

  1. START-UP COSTS – Start up costs vary from many things. Start-up costs are the various costs which I will need to set up my business. The start-up costs which will occur in my business are stock, decoration, equipment, general (marketing, advertising, daily bills etc.) and miscellaneous costs.
  2. FIXED COSTS – Fixed costs are the expenses which have to be paid either I make a lot of profit in my business or none at all. These costs are fixed and do not vary. They are always the same costs. For example if I was paying rent for something weekly this would be a fixed cost because I would be paying the same amount every week, this amount will no change until the rate is paid off over a period of time. Fixed costs are definite and they do not depend upon how much turnover occurs in your business.
  3. VARIABLE COSTS – Variable costs are the costs which keep vary they are described as costs which are always different (opposite of fixed costs). Variable costs differ depending on a number of things. They may differ on my businesses turnover, the outcome of a firm, the amount of products/services I provide or any other type of business related actions.

Now I am going to move on and calculate all of the tree main types of cost, this will help me to find out how much money I will need before starting my business, it is the ladder to my break- even point which lets me the minimum number of products/ services I need to sell/provide in order to make sure my business is not making a lose.

START-UP COSTS: for the first 2 weeks… 

Firstly I will have to think about my start up costs. This is when I am firstly opening my shop I will have to buy many things to ensure my salon is up to date. I am going to think about the stock I am going to need for the first 2 weeks, how I am going to decorate my shop, the equipments needed for my services and general/ miscellaneous costs.

I will have a number of start-up costs when I first open my business. There are five main categories of start-up costs. These are; opening stock costs, decoration costs, equipment costs, general costs and miscellaneous costs. Below I will state all of my start-up costs, I will need to make a list of all the items I will need/sell for my service and list how many of these items I will need (my decision will be based on an estimate of how many items I will need for 2 weeks).then I will need to research on how mush each item will cost me to buy on a wholesalers price. I will compare different companies to make sure I get the best deals and also to make sure that I have a back-up supplier in case the main company cannot supply my stock. I will then total all of these costs and this amount will be the total of my start up costs. I need to know how much my start up costs are so that I can estimate how much extra money my business will be needing when I total up all of my other costs. Doing this will help my business be successful and it will thrive to victory. I am going to buy stock on an every two weekly scale because thing can go out of date.

Opening cost stocks are the main products needed for me to start my business. My opening stock will be my ingredients which I will use to make my treatments and so on.

Opening stock:

Join now!

Above are my basis stock cost, I have kept an extra bought of £500 incase I need to add on to my list. As you can see above I have researched about to different companies’ wholesale price to make sure I am saving the maximum amount of money at the start of my business where I do not have a lot to spend. For some of the items I did not find any suitable company that could be a potential wholesaler. I did a search on the internet to try and find a suitable wholesaler but unfortunately I was ...

This is a preview of the whole essay