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What does Finance involve.

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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. ...read more.


Advantages of me choosing this option is that most banks generally have a low interest rate compared to other money lenders. This means I will only have to pay back a lower percentage then other money lenders. Another advantage is I will not have to go far because of the internet banking and banks are relying close to me. Similarly banks are more reliable and save to use so I will not have to go anywhere else. Disadvantages of me choosing this option is that banks can ask you to pay back more money sooner. If this was to happen to me it could cause further financial problems for my business as I might not have enough money. Also Banks have a fixed rate. This means even if I don't earn the amount I need for the week I will have to still pay it back somehow. So if I do not make mush profit in that week I cannot pay less or if I make huge profit I cannot pay more. A loan would be an easy way for me to get money form but I don't think it would be very practical for me because I will have other fixed cost to pay and adding yet another cost that if I don't manage to pay will have serious consequences which will not help me in my business. However, I would get a loan for a smaller amount and use other remaining potions to help me with the rest of the money but before I make any further decision I will move on and look at other remaining options. Option 2: My second option is to go into partnership. Partnership is where I can get partner(s) to put money in to my business to help me make up the �17,000. For example I would invest �6000 and I could get two more people to invest �5500 each. ...read more.


After working out my fixed costs I worked out my variable costs and used this to work out my average selling price (ASP) and my average variable costs (AVC). My average selling price came to �18.25. This means that every time somebody buys a product or uses my service from my business I will be making �18.25. My average variable costs came to �5.58. This means that every time somebody buys a product or uses my service from my business it will be costing me �5.58 to produce that product. After calculating all of these, I lastly calculated my break even point (Break even point is the point at which I have sold enough products/services to not make a loss but I will neither be gaining a profit. my income in the business will be neutral.) which was 186.53. I rounded this to 187 as it is much easier to deal with whole numbers and also I cannot sell half of a product or service. Keeping a close eye on finance is absolutely crucial for my business. It can make the difference between my business prospering and not being successful at all. I will need to make sure that I sell enough products/services to at least reach my break even point within 2 weeks. Finance makes sure that I manage my money so that I know efficiently about my resources and know which risks are worth taking to raise more money for my business. This is very important to my business as I do not want to fall into debts. Therefore, I will make sure my finance is handled properly as I will be keeping a close eye on it myself and I will be monitoring every step of my business. I will make sure I know where my money is being invested, what the risks are if there is any and how much profit or loss I am making to make sure my business is not a fail. ?? ?? ?? ?? Fizzy Man GCSE ...read more.

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