Send the link below via email or IMCopy
Present to your audienceStart remote presentation
- Invited audience members will follow you as you navigate and present
- People invited to a presentation do not need a Prezi account
- This link expires 10 minutes after you close the presentation
- A maximum of 30 users can follow your presentation
- Learn more about this feature in our knowledge base article
Our Business Idea
Transcript of Our Business Idea
Family / Friends
We feel the area of Longbridge will be suitable to set up your business. The area is currently undergoing regeneration and already has heavily populated sites in place which we feel will be a big impact on your business. These include:
MG Motor UK
Our business idea is to open a bar/restaurant in the Birmingham area. Operating as a sole trader initially, long hours and big responsibility will be involved. As the venture grows, the opportunity to expand into a partnership or even further will be available. We will assess all ideas of the sources of finance that are suitable and unsuitable for your new business.
Unsuitable sources of finance
Sources Suitable For Expansion
Pay back when suitable
They do not expect any profits to be split
No input into the business
Can be a limited amount
Fixed interest rate
Small Businesses pay higher interest rate.
Finance plan needed
Stipulations on how the money can be spent.
Simple to arrange
Interest only on days overdrawn
Can be recalled
Not a long term fix for the company.
No need to borrow
Lose everything if business fails.
Can be ongoing
Upgrades offered at time of renewal.
Can be taken away if payments not met
Good credit needed
no need for collateral (personal asses)
BAs making investment decisions quickly
no repayments or interest
Giving up a share of business
Less structural support available than from investing company
Takes longer to find
Suitable for investments from £10,000 - £250,000
What You Need
To start your business you will need:
Food and drink supplies
Tables and chairs
Music (equipment + speakers)
Venture Capital Funding
Do not need to pay back
Can bring valuable skills, contacts and experience to business
provide follow-up funding as the business grows
explore and execute growth ideas.
loans from £50,000 and some more than £250,000
Share a business
Investor’s control over company
provide regular information for the investor to monitor
generally expect equity stake of 20-40%
provides a large and quick boost to cash flow
some customers may pay quickly to factors
Useful information about customers (credit standings)
helps to protect from bad debts
discount charge (interest) and fees
Interested in handling bills from firms sales over £1m a year
reclaim money if the customer does not pay (resource factoring)
Some customers may prefer to deal directly with you
May effect customers' thinking of you
Do not need to pay back
Won’t lose control over your business
Long time to obtain grant
Certain conditions may apply(location)
Preparing government grant proposals
do not dilute the ownership of the company
increasing the value of shares
flexible - management have complete control over how they are reinvested and what proportion is kept rather than paid as dividends
Sales of Shares
No need to pay back
new ideas, skills and views to the business
Purpose Of Financial Statements
Sources of Finance
more stable business planning environment
Repayment from 10-30years
Very short repayment as low as 2 years
lower interest rates
tax deductible interest payments
can sub-let some of your business premises.
Secured against property
Decent sized deposit
Hard to move your business
Interest rate increases
Loose a part of a business
no Shares for Sole trader
Share any profit
right to sell shares
conflict between shareholders and other stakeholders
Public & Private Limited Companies
The purpose of financial statements is to enable a business to establish the result of its operations over a period of time.
Trial Balance is a list of closing balances of ledger accounts. It acts as the first step in the preparation of financial statements.Ledger balances are segregated into debit balances and credit balances.
The income statement reports a company's revenue, expenses, and net income over a period of time.
Helps identify whether the profit earned by the business is sustainable
Enables comparison with other similar businesses(competitors)
Allows providers of finance to see whether the business is able to generate sufficient profits to remain viable (in conjunction with the cash flow statement)
Cash flow statement
Balance sheet provides the financial position of the company at a given time.
This process is repeated monthly, quarterly and annually
The balance sheet shows the status of the company's asset, liability and equity accounts
Detailing balance of income and expenditure over the preceding period.
The purpose of the cash flow statement is to provide information about a company's gross receipts and gross payments for a specified period of time. Distributed along with a company's Income Statement and Balance Sheet.
Statement must disclose:
the amount of interest paid
the amount of income taxes paid
any significant investing and financing activities which did not require the use of cash.
Owner is independent to run business
able to give personal service and supervise all areas of the business
easy to set up, e.g. use own name
expansion is limited
long hours, difficult to take holidays, if ill business may have to either slow or stop
A person who is in the business on their own, final account produced is the trading, profit and loss account and balance sheet on annual basis normally.
possibility of increased capital
individuals may be able to specialise in particular areas
more people to illness and holidays
decisions may take longer, other partners may need to be consulted
disagreements may arise between partners
each partner is liable in law for dealings and business debts - unless is a limited liability partnership
retirement or death of one partner ma adversely affect the running of the business
Consists of 2 to 20 partners. Have to follow rules of Partnership Act 1890 or create own partnership agreement. Final account - trading, profit and loss account, balance sheet and an appropriation section at the end of profit and loss account.
limited liability - shareholders can only lose amount of their investment
separate legal entity - company is separae from its owners, anyone taking legal action can only do so againstthe company not individuals
ability to raise finance - stock exchange ( plc), smaller companies from friends and family
may gain a higher status in business community
can employ specialists
voting rights - a sole trader who has converted into a limited company may lose some control over the business.
more documentation e.g. preparation of formal annual accounts, cost of administering the company
A limited company is a separate legal entity, owned by shareholders and run by directors. Final accounts produced are trading, profit and loss account with an appropriation section and balance sheet.
Shareholders are the owners of a limited company. They buy shares which represent part ownership of a company.