34D I LOVE THESE WORDS

To what extent
Asks students to evaluate the success or otherwise of one argument or concept over another. Students should present a conclusion, supported by arguments. For example: To what extent should LDCs adopt outward-oriented strategies rather than inward-oriented strategies to promote economic development



Evaluate
Invites students to make an appraisal of a situation. Students should weigh the nature of the evidence available and discuss the convincing aspects of an argument as well as its implications and limitations, and the less convincing elements within an argument. For example: Evaluate alternative policies designed to reduce inflation.
Evaluation occurs when a judgment is made. It is the weighing or measuring of factors followed by an attempt to give relative weight to those factors. Questions that begin "evaluate", "assess", "critically assess", "discuss" or "to what extent" require students to show their skills of evaluation in order to reach the highest achievement levels.
There are many ways that students can be encouraged to improve their skills of evaluation.

1. When factors such as causes, consequences or remedies are asked for, students should attempt to identify the most important ones and then to justify the reason for the choice.
   


2. When advantages and disadvantages are asked for, students should attempt to identify the most important advantage (or disadvantage) and then justify the reason for the choice.
   


3. When strategies are asked for, students should attempt to assess the short term and long term implications.
   


4. When data is offered, students may question its validity, in terms of whether it is appropriate, whether it is reliable, or whether it is still relevant
   


5. When summarizing a theory, students may question its validity, in terms of whether it is appropriate, whether it is reliable, or whether it is still relevant.

Analyse
Here you are being asked to provide a comparison in detail of the causes and any possible effects of how the thing under consideration has developed or happened. Wherever it is possible ,try to give examples, this is especially true if the material offered has examples within it. If the term “critically" is prior to the term analyse. This is telling you that you need to make suggestions as to possibly why or why not something may or may not, in your own opinion, be appropriate considering the issue or event being analysed. Always try to offer support to your findings and/or opinions. For example: Analyse the extent to which foreign aid promotes economic development

34D 41tips

Develop ways to read books more quickly and effectively

1. Make sure you try to scan your textbook prior to arriving at your class.
2. When scanning a book make sure you are reading for both details and ideas.
3. Always read any assignment guides and materials in FULL.
4. Try to always look for what are the main or central ideas that need to be covered and what exactly will be assessed.
5. A useful measure to recall the material you have read is to get another person to ask you questions or alternatively ask yourself questions about the material you have read. i.e. What is the main assessment criteria?
6. Carry out reflection by transferring the different information that you have read into useful and practical knowledge. (i.e." Why exactly is this criteria or point important?)
7. Write brief summaries.

How to improve my learning in the classroom
8. ALWAYS ..Go to your class. . . . Every lesson is important. Do not skip lessons.
9. Try to think about the specific subject prior to you attending the class. Try to anticipate what you think will be discussed in class.
10. Make sure you always pay attention for the entire class. Do not allow yourself to become distracted.
11. Concentrate on what your teacher is doing and saying, not on the people walking down the corridor or the notices on the class notice board.
12.Always focus on what the teacher/speaker is actually saying. Try to learn how to tune out the teacher/speaker's voice quality, mannerisms, appearance, accent etc.
13. It is always important to make sure you are listening with your mind not judging what is said with your emotions.
14. Try to develop the skills of listening for the important word cues that illustrate or reveal the teacher/speaker’s emphasis. These include words like most important, on the other hand, in addition to etc.

Tips on note taking.
15. Make sure you take as complete notes as possible. Practice your note taking skills. Learn how to abbreviate words and develop you own shorthand methods. One useful tip is to leave out vowels (wrk hrd) and use a ‘g’ for ‘ing’ (stdyng). Use other common single letters or different symbols
16. Make sure you get the important facts or details written down correctly.
17. Try to have just one notebook and keep all your individual subject specific notes in that one book.
18. It is important to re-read and review your notes. Read them again after the class and try to fill in any blanks or missed out notes. Read and review again before the next class in order to remember what you covered last time and try to anticipate what you expect to come this time.
Tips on exam taking
19. Read the whole exam paper first. Make sure you read all the relevant exam questions first. 20. It is good to answer what you think are the easiest questions first.
21. Make sure you underline or highlight the most important facts and any key words in questions before you begin to write your answer.
22. It is always good to take a couple of minutes to organize your thoughts before you begin to write.
23. When you are taking a true/false or multiple choice test pay attention exactly what is written - consider the absolutes. Choose the BEST answer.
24. Do not leave a multiple choice or true / false question blank.Always try to answer any questions you are sure you know the answer to first. Come back to the more difficult ones later.
25. Use your time wisely. Do not spend more than the allocated length of time any one specific question.
26. Never leave an exam early. Look back over your answers if you have the time and proof read carefully

Important dos and do nots
27. Do not study for a test while watching television or eating a meal etc.
28. Do not try to study while straining to listen to the basketball game on the TV in the other room.
29. Do not stay up all night studying.
30. Do not try to study when you are very sleepy.
31. Do practice past papers and exam questions to improve your test performance.
32. Do hand in your homework neatly done and on time.
33. Do practice different memory strategies.
34. Do stay healthy and fit and try to eliminate your bad time wasting habits

Managing you time
35. It’s a good idea to keep a daily/weekly "to do" calendar/notebook. Put the different tasks in the order of priority. Make sure your list is realistic.
36. It is advisable to try to schedule work or study that demands high levels of concentration, such as taking notes on a specific text in 50 minute time periods. Then have a short break.
37. Make sure you have always allowed enough time in your schedule for conducting library research.
38. When researching on the internet do not become distracted by irrelevant sites.
39. Get specialist help wherever possible. Make sure assessable work has been properly proofread before submitting it
40. Get some sleep.
41. Balance your time – even though study is extremely important, don’t cancel all of your leisure activities either.

I found it!

Finally, I found it!!!!!!Male bra!!!!

I hate pink.........special bright pink!!!!!!!!!!!

35D WORD REVISION 2 (whole page)

PREDATORY PRICING:setting a price low enough to drive competitors out of market or the business.....



PRICE DISCRIMINATION:means charging different prices to different people for what is essential the same product



PRICE ELASTICITY:is a measure of the way the demand for a good responds to a change in price



PRICING STRATEGY:is the medium-to long -term plan for the price level that a firm wished to set for a product



PRICING TACTICS:ways of using price to take advantage of a short-term opportunity or threat



PRIMARY RESEARCH:field research,which has first-hand information and relevant to the business which is new

SECONDARY RESEARCH:which has second-hand information and has collection the data and has already existed

PRODUCT DIFFERENTIATION:is the extent to which consumers perceive one product as being different from its rivals

PRODUCT LIFE CYCLE:the theory that all products follow a similar life course of conception


PRODUCT PORTFOLIO:the range of products or brands held by a company that provide it with diversified sources of income

QUALITATIVE RESEARCH:is in-depth research into the motivations behind consumer behaviour or attitudes
QUANTITATIVE RESEARCH:research using pre-set questions among a large enough sample size to provide statistically valid data

SAMPLE:a group of respondents to a market research exercise selected to be representative of the views of the target market as a whole

SIGNIFICANCE TESTING:checking the statistical validity of a sample result

UNIQUE SELLING POINT:the feature of a product that can be focused on in order to differentiate it from all competition

35D I met my girlfriend today!

after arrived in BEIJING.....after I cleaned my suitcase...after I took a shower...
I went to school to meet my girlfriend!Because of the school ceremony...she wore so unusual>..that I can`t identify her .....But still.....you knew what I mean.....hahahahah

we had a deep hug..and `````and`````...I just wanted to stop the time at that moment.....

Time is limited.....I just saw her off in front of the door>....what a pity.....

By the way, 35 to have the business exam...this is the point!

35D WORD REVISION 1 (half page)

ADDING VALUE:the process of increasing the value of resources by changing them during the production process(the difference between the price of the finished product and the costs incurred in making it)

BOSTON MATRIX:a method of analysing the current position of the products within a firm`s portfolio.

DESIGN MIX:how the firm combines three key design elements in order to fit the market gap that has been identified.

1. aesthetic appeal(appeal to the senses)
2. function(how well the product works and lasts)
3. economic manufacture

DISTRIBUTION CHANNELS:the stage of ownership that take place as a product moves from the manufacture to the consumer

EXTENSION STRATEGY:a medium-to large-term plan for lengthening the life cycle of the a product or brand

INCOME ELASTICITY:measures the way in which demand changes when consumer`s real income change

MARKET MIX:the main variables through which a firm carries out its marketing strategy(4P)

MARKET OBJECTIVES:marketing department must achieve in order to help the company achieve its overall objectives

MARKETING STRATEGY:a medium-to long-term plan for meeting marketing objectives

MARKET RESEARCH:the process of gathering primary and secondary data on the consumer

MARKET SEGMENTATION:analysing a market to identify the different types of the consumer

MARKET SHARE:the percentage of all the sales within a market that are held by one brand or company

MARKET SIZE:the total sales of the producer within a market-place

MASS MARKETING:target the firm`s advertising and promotional spending an the whole market

NICHE MARKETING:a small range of market

I need some help....chris

I have balloondebate，why should I survive？？I·m a cook.....could you give me some ideas.......thanks

list....Chris

After I saw my name on the candidate list.....I got confused/.

I have 2 ways

1.Ask Mr Ian if my information is right or not......it will impact my decision directly....

2.Take the exam in Jan .......I have 5weeks more .......Chris ....give me some help.....what should I do to improve my business.......

Male Bra

STRINGS ATTACHED

Sorry No blog today!

Because of the Math test tomorrow,so....no blog today......

Video revision(3)

ORGANISATION STRUCTURES

• size
• culture
• activities
• history

Delayering:reduction of the length of a chain of command by the removal of one or more "layers" of a hierarchy.

Advantage:

• more communication
• more responsibility
• better motivation
• reduced the cost

drawback:

• causes staff redundancies
• loss of knowledge
• "loss of a corporate memory'
• affect customer relationships

LEADERSHIP STYLES

1. Autocratic
2. paternalistic
3. consultative
4. democratic

STOCK:

1. raw materials
2. partly finished products
3. finished products

STOCK CONTROL:

JUST IN TIME(JAPAN)

ADVANTAGES:

1. IMPROVES CASH FLOW
2. DECREASE WORKING CAPITAL REQUIRED
3. MORE SPACE MORE PRODUCTION
4. LESS WASTE AND DAMAGE
5. LINK WITH SUPPLIER IMPROVED
6. MORE CONTROL OF SUPPLIER
7. OPPORTUNITY OF COMPUTERISATION
8. WORKER MOTIVATION
9. MORE FLEXIBLE DESIGN OF PRODUCT

DISADVANTAGES:

1. GREAT RELIANCE ON THE SUPPLIERS
2. ORDER COST PER UNIT MAY BE HIGH
3. ADMINISTRATIVE BURDEN AND COST
4. HARD TO COPY WITH SHARP RISE IN DEMAND
5. MAY LET CUSTOMERS DOWN
6. NEED EFFICIENT MANAGEMENT AND CONTROL SYSTEMS

NEWS:VAT to be cut by 2.5%

A talk with MR brown
As we know,the VAT used to be 17.5%.but recently,aimed at kick-starting the economy.government want to cut VAT by 2.5% to 15%.

WHY IS THAT?
In my opinions:because of the recession.People get less money than before.so people won`t buy more products...adding the "economy emergency"has impack whole world.It hits consumers` confident indeed!And "credit crunch"for instance harder to borrow from the bank.so the bank gets less interest rate!!!It lend to bankrupt.......

So what is VAT?
I think it`s a type of tax included the products.Such as food meat....etc...
Government uses that tax to improve produce merit goods.New equipments and health care.
And some of taxes are used to improve public goods!(road,motoway,road sign)

Why government cuts VAT?
The main point is to increase expenditure!If you bought a bottle of milk was 2.35pounds(2pounds for sale,0.35pound for 17.5%VAT)and you buy it now should pay2.3pounds(2pounds sale,0.3pound for 15%VAT)you save 5pence!That just a example to show how the VAT impack real life.That means people pay less on the products even if the price of the product doesn`t change before the tax.

But if cut the VAT,goverment will loss more taxes to improve merit goods!
Why?>..........
Is it really influence the damand and supply?
As we know food and meat are inelastic!That means if price goes down,the quantity of the good won`t change alot!It doesn`t really affect people to consume....It doesn`t make a big difference!

mortgage problem and job problem can be solved out!
Because of the price of the house is decreasing!People can not pay back!If VAT cut down,people have more money in pocket!It will slowdown the problem.......

How about job problem?
To be continued................................

Christmas Gifts(enjoy it)

BOOM FOR ONLINE FASHION FIRM ASOS

a. possible reasons for the success of ASOS
I think the possible reasons why ASOS make a big success are:
First,they sale on online you can order the clothes 24hours!!! And ask them to delivery it for you.It makes a big difference from shop.Assuming you are an housewife,you have no time go out for shopping,you should look after your child and prepare the dinner for you husband,wishing clothes.....etc...if you buy clothes online,it will save you much time....

Second, Location,as we know some businesses opened in their own house,it means you don`t need to open a shop and pay rent monthly!It`s easy to open,and easy to manage...

Third,you can do all these things by yourself,or ask your family to help you,you don`t have to employ people,it also saves money.

Because of second and third reasons,they can offer low price....it`s full of competition...

b. who the main competitors are:
Because not only ASOS manages clothes online,more and more small firms of business aim at this market...
Some famous brand are popular,so people prefer to buy some luxury clothes than spend money online.
c. strengths/weaknesses of their products
strengths:
24 hours open,free delivery?pay with credit card.update information.easy to start-up.no pay for rent and employee salary.you can offer low price comparing with same product.easy to gain profit

weaknesses:
Maybe normal quality??And not famous brand name?New consumers have less confident than entity clothes shop.
d. what steps can they take to ensure continued success?
find the market gap
improve quality of the clothes
do some market tests or market research
the features of the products.some humanize services?

I `M FEELING LUCKY

When you explore the website,have you ever typed "www.google.co.uk"?If you have,and did you use the button which is next to the "Google search"called "I`m felling lucky"?I don`t think so....

so,what does that use for?
If you want to search some website,you just need to press "Google search"then you will see lots lots websites which is related to the word which you typed.But if you press"I`m feeling lucky" then you will go to the official website directly.

For example:
First you type "apple"(I want to something new about ipods!Not fruit)then press "Google search" you will see hundreds of websites not just apple company but something about apples(fruit) supply or some weird thing happened related "apple".

Second back to the homepage of Google,then press "I`m feeling lucky?",you will see the apple official website immediatly.Which means you can visit the official website easyly.

But does this button help Google to earn more profit?--Obviously not!!!So,why doesn`t Google abolish the button???
According to "Marissa Maye"said,it is essential for Google.
As we know because of keeping this button,Google has lost more profit!Because 99% of the incomes is advertising, therefore,advertising is the main way to make profit for Google.If more and more people click"I`m feeling lucky",they will enter the official website without adverts,so the Google can`t make more profit.....It`s huge loss.........

Sergey Brin who is Google founder said merely 1% people used the "I`m feeling lucky"button to visit the website.That`s means Google will lose 1.1billion dollars annually.......

Video revision(2)

MARKET STRATEGY

Objectives: what you want to achieve.

1. Specific—increase the sales
2. Measurable—10percent
3. Within a time frame—in 3 years
   

Strategy: how you achieve.

Niche market: focus on a specific segment of the market.
Mass market: much bigger market.

Introduction:

1. Create awareness
2. Encourage sales
3. Develop an image

Decline :( Product start to fall)

• Withdraw product
• Wait for other competitors to withdraw products
• Extension strategy

MARKET PLANNING

4PS:

• Product
• Price

1. new product pricing strategies
2. existing product pricing strategies
3. pricing methods
4. pricing tactics

• Place
• Promotion

1.above the line(advertising):TV,RADIO MAGAZINE

2.below the line:

a.sales promotion:BOGOF,25%extra free

b.personal selling:face-to-face selling

c.direct marketing:mailshots

pricing strategies:

• price leader strategy(a firm sets market prices then follows other competitors)
• price taker strategy(a firm follows market prices sets by the leader)
• predator strategy(a firm undercuts the competitors to force them out of the market)

pricing:

cost-plus:a amount of profit is added on the unit cost

contribution

discrimination:setting different prices for the same product/service at different times

loss leaders:very low prices to attract customers

psychological:3.99

chapter 4 finance(3)

THE BALANCE SHEET
Business need to know how much they are worth.To find out,a business can use its balance sheet.This shows it how much it owns against how much it owes .The balance sheet is often called a "snapshot"because it shows the situation at the point at which it was drawn up.The balance sheet for a small business is relatively simple,that for a large business more complex,but the principles are the same.

Some definitions:
assets:anything that a business owns that has a value.
creditors:those to whom the business owns money such as banks
debtors:those who owe the business money,such as other businesses that have yet to pay for goods bought
liabilities:anything that a business owes that has a value

THE ACCOUNT

There are three parts to a balance sheet.Each is linked to the others

1. Assets--what a business owns
2. liabilities --what a business owns
3. capital--where the business has raised in money from

ASSET

Items,are only assets if they can be valued."Reputation",for example,does not appear in a balance sheet.Assets are either fixed(e.g buildings and machinery used in production)or current (e.g stocks of finished product that could be easily turned into cash,or money that is owed to the business by debtors)

LIABILITIES

Items are only liabilities if they can be valued.Liabilities are either current (debts that must be paid back within a year,such as bank overdraft and debts owed to creditors)or long term(debts that the business has more that a year to repay,such as long-term loans and mortgages)

CAPITAL

The final part of the account shows how the money for these net assets employed was raised.This could be via shares,though profit,or from profit made in previous period.Capital must balance with net current assets.

KEY POINT!

fixed assets +current assets =total assets

current liabilities+long-term liabilities=total liabilities

total assets -total liabilities=net assets employed

PROFIT AND LOSS ACCOUNT

THE ACCOUNT

3 parts to the profit and loss account

1. trading account -what the business has sold and what it has cost to achieve these sales.
2. profit and loss account-gross profit minus expenses
3. appropriation account-where the net profit has gone

INCOME

The account shows that what the business has earn.This is called its income.The biggest source of income for most business is sales revenue.However,the cost of buying or marketing the items sold has to be deducted from this total.

STOCK

The only time this is different is if you have stock left over.This is our "opening stock"for the next year.

EXPENSES

Buying and selling the pencils will have taken you time,you may also need somewhere to sell them from .These are all expenses.A bigger business will have to pay items like wages,rent on premises,power bills and equipment costs.

GROSS AND NET PROFIT

Gross profit is the amount that you have made before expenses are taken into account .Net profit is the amount after expenses are deducted.

Appropriation account

What happens to the gross profit.Some of it goes in taxes,some may be given to shareholders in the forms of dividends and some may be kept to help the finances of the business.

KEY POINT!

trading account :

sales revenue-costs of sales=gross profit

profit and loss account:

gross profit -expenses=net profit

appropriation account:

profit after tax-dividends=retained profit

CASH AND CASH FLOW

SOME DEFINITIONS:

budget-a plan of future expenditure

cash-flow crisis-when a business cannot pay its immediate debts

forecast -an estimate;trying to look into the future

CASH FLOW

If there is more cash coming into in than the business needs ,this is called cash surplus,If there is less cash coming than the business needs,it is called cash shortage.Remember that it can be just as bad to have too much cash as to have too little.It is inefficient to have too much.It is better to turn an excess of cash into assets that can earn more money

KEY POINT!

If a business knows when it is going to need cash it can plan to do something about it

1. borrow money
2. increase sales
3. decrease costs
4. persuade people to pay more quickly

THE NEXT BOOKHOLDER IS NARA!!!!!!

chapter 4 finance(2)

Breaking even

When revenue is greater than costs, a business is making a profit.Where revenue is less that costs,the business is making a loss.The point where the amount of revenue is equal to the amount of costs is called the break even point.At this point the business is making neither a profit nor a loss.



Some definitions:

breakeven:the point where a business is making neither profit nor loss.

contribution:a method of using breakeven to show how much(if anything)each product contributes to profit.



Moving breakeven:

If a business is making a loss,it can try to make changes.It can seek either to lower costs or to increase revenue.Managers can use breakeven as a tool to help them predict what might happen as a result of such changes.



Contribution

The example we have been looking at assumes a single product,and that all output is sold.Obviously this is not always the case.To see how each product is doing,managers can use the contribution method.This is looks at the contribution to overall revenue from the sale of each product.Contribution is calculated by taking the variable costs of a product away from its revenue.The formula for working out the number of sales necessary to break even is:

Formula:

breakeven sales=fixed costs/contribution

It is also important for a business to look at revenue -that is,actual sales -rather than the number produced,as some products may not be sold.







Financial documents

Think about a transaction that you have carried out in a shop.What paperwork was involved?What about if you ordered something online?When you buy something in a shop you are entitled to a receipt,to show that you have paid for the goods.The business also keeps a record of the purchase.



Some definitions:

B2B:the abbreviation for "business-to-business"transactions

B2C:the abbreviation for "business-to-consumer"transactions

transaction:the term used for buying and selling a good or service



Business-to-consumer transactions(B2C)

The process of ordering,buying and paying for something involves records.Imagine buying a present from a catalogue.You order it,it is delivered with a request for payment, you pay for it.Buying from the internet is similar.You order the good,usually pay for it then and there,and receive a receipt to print off.The business then delivers it.If you are unhappy with it,you can return it and get a refund.



Business-to-business transactions(B2B)

Business-to-business transaction are not much different.If a business wants to buy something,say stock for sale or raw materials,it will buy it from another business.There are three phases to the transaction:the order,the delivery and the payment.Each has its own special document to make sure that each business has a record of the transaction .



The order
Another word for"buy"is "purchase".Business use a purchase order to say what they want to buy,how much they want and what they expect to pay.Between businesses,it is rare for payment to be made at this stage.Usually it is made on delivery.

The delivery
The goods are delivered to the buyer,who signs the delivery note to show that the goods have been accepted.The buyer completes its own paperwork to show that the goods have been received.This goods received note is passed to finance so that it knows it can pay for the goods.

The payment
The seller prepares a bill for the buyer,so that it knows how much to pay,when and how .This is called a sales involved .This will match the description of the goods delivered on the delivery note.The buyer then pays for the goods.Another word for payment is"remittance".A remittance advice slip is sent with the payment.This says what the money is for.The seller may then send the buyer a receipt,to show that payment has been accepted.If an order is incomplete or there is a problem with it,the seller may issue a credit note,allowing the buyer credit against a future purchase.

Regular business
If the two businesses trade together regularly,the buyer may have an account with the seller.In this case, the buyer may be invoiced on a regular basis.A record of sales and payments will be kept on a statement of account,prepared by the seller and checked by the buyer.

KEY POINT!

The all transactions ,there are 3 parts:

1. the order
2. the delivery
3. the payment

chapter 4 finance(1)

SOURCES OF FINANCE
the money that a business needs may come from its owner,from lenders or people who are willing to take a risk,or from other outside sources.usually there is a risk attached to borrowing money,but that is what enterprise is all about--risk taking

some definitions:

• discount:a reduction in prices
• retained profit:amounts not distributed to owners but "ploughed back"into the business
• start-up grants:an initial sum of money,given to help a business become established

owners` funds

one of the main sources of finance for starting a business is the money that the owners already have.they can risk this in the business in the hope that the business will be profitable.sole traders may use their own funds.partnerships will share resources.limited companies can rise funds by selling shares to the owners(the shareholders).once a business is a success and profitable,it may keep some of its profit for future finance.this is called retained profit.

Borrowing

if business owners do not already have the funds,then they need to borrow them.usually businesses borrow from lending institutions such as banks.the most common forms of business borrowing are shown in the table below.there is a cost to borrowing.usually this takes the form of interest.generally,the riskier the loan and the longer the period of borrowing,the more interest will need to be paid.

short term:(from a few days up to 3 years)

overdrafts

loans

trade credit

factoring

medium-term:(from 3 years to 10 years)

hire purchase

loans

debentures

long-term:(10 years +)

loans

mortgages

the types of borrowing can be described as follows:

trade credit--a business promises to pay in the future for goods that is has received (hopefully,it will pay for the goods that it has sold them).the period of trade credit can be up to 90 days but is often less.unusually,interest is seldom charged-but there will be penalties if payment is not made and there could be discount for early payment.

overdrafts--a bank allows a business to take more out of its account than it has in,up to an agreed limit.this is very flexible and interest is only charged on what is actually owed,for the time that it is owed.

loans--borrowing a fixed amount,for a fixed term.the business makes regular repayments and is charged interest on the full amount for the term of the loan.

factoring--selling debts to a specialist firm,which then collects the money owed.the factoring firm makes its money by paying less for the debt than it actually collects.

hire purchase--paying for a piece of plant or equipment in instalments.the business can use the item while it is still paying for it.

mortgages--long-term loans used to buy expensive items such as land or buildings.

debentures--guarantees to pay at a time in the future,which may offer low risk but good interest rates for investors.they can be issued by large businesses.

Secured and unsecured borrowing

a mortgage is a secured loan,an overdraft is likely to be unsecured.but what does this mean?in the case of the mortgages,if it is not paid,the lending institution may be able to retrieve its money by seizing and selling the asset(a house or factory,for instance).if the loan is unsecured,the lender has no security of this type.

Grants

sometimes businesses do not have to use their own funds or borrow them,because there are grants available.a grant is sum of money made available to a business by a body such as central government,the European union or a local council.charities may also provide grants.the prince`s youth business trust,for example,provide start-up grants for businesses set up by young people.

key points!

three main sources where come from

• owners` own money--owners`funds
• money from banks or other lenders--borrowed funds
• money that dose not have to be paid--grants

COST AND REVENUE

businesses produce either a good for sale or a service.if it is a good,there are raw materials and other inputs to pay for.if it is a service,the business needs to let people know that it exists. in either case,therefore,there are costs.the money that the businesses received for its sales is called revenue.business costs are divided into fixed costs -also called indirect costs or overheads-and variable costs .

Fixed costs

Fixed costs do not vary with output-that is, with the amount produced.Example are rent,interest payments and rates.They have to be paid whether or not a business is producing.

Variable costs

Variable costs are those costs that vary with output,such as raw materials.packaging,parts and components,ingredients,power and labour charges.Total cost is fixed cost plus variable cost.Sometimes it is difficult to decide whether a cost is fixed or variable,as it may have elements of both within it.Utilities are a case in point .A power or telecommunications bill,for example,has a fixed element for the supply of the service,plus a variable element for the amount of the service used.

Semi-variable costs

These are costs that do vary with output,but not directly.For example,a business may need to pay overtime,or a shop may need to open for longer hours.

Other definitions

Costs can be divided into start-up costs and running costs.Start-up costs are only paid when setting up a business.Financing this may become part of a business`s fixed costs.Running or operational costs have to be paid to keep the business going.These may be fixed costs such as rent,or variable costs such as wages.

KEY POINT!

• fixed costs do not vary with output
• Variable costs vary with output.
• Semi-variable costs vary indirectly with output
• Start-up costs are paid to get a business started
• Running costs are paid to keep it going

some definitions:

• output:the amount of a good produced,or service carried out
• overheads:the term often used in accounting to refer to fixed costs
• utilities:essential services such as water and power