Here are some key "need to know" notes based on the
provided sources:
22.2 Lesson 1: SMARTER Goals
● Business Venture: This refers to a new business that is
established with a plan and the expectation of achieving
financial gain.
● Stages in Setting Up a Business: The process involves
three main stages: developing a Business Plan, moving
to an Action Plan, and finally Setting Up a Business.
● Environmental Scanning: This is the ongoing process of
tracking trends and occurrences within an organization's
internal and external environment that are relevant to its
current and future success.
● SMARTER Goals Acronym: This framework helps in
setting effective goals. Each letter represents a key
characteristic:
○ Specific: Goals should be clear and easy to achieve.
○ Measurable: Progress towards the goal should be
quantifiable.
○ Actionable: The steps to achieve the goal must be
within your control.
○ Realistic: Goals need to be challenging yet
achievable, building belief in one's ability to succeed.
○ Time-bound: A specific date for completion should be
set, creating a sense of urgency.
○ Ethical: Goals should align with high ethical
standards.
○ Recordable: Goals should be written down, and
progress should be concrete and evident.
22.3 Lesson 2: Independent vs Collaborative Work
● Working Independently: This means initiating a business
venture entirely on your own, taking full responsibility for
all tasks and decisions.
○ Advantages: Ability to set your own business goals,
make decisions quickly without consultation, be
accountable for your own actions and success, and
retain all profits.
○ Key Skills: Requires strong Organisational skills
(collecting data, prioritising tasks, managing
schedules), Multitasking abilities (managing multiple
projects), Discipline (maintaining work hours,
financial control, reinvesting profits), Flexibility
(being open to suggestions, adapting, turning
weaknesses into strengths), Self-confidence (belief
in self and product, learning from criticism), and Time
management (planning and completing work on
time).
● Working Collaboratively: This involves working with one
or more individuals to conceptualize, develop, or execute
business ideas and processes.
○ Advantages: More skills become available, ideas
can be shared, multiple perspectives (two heads are
better than one), and the ability to discuss major
decisions and motivate each other.
22.4 Lesson 3: Funding
● Top Reason Start-ups Fail: The primary reason new
businesses fail is running out of cash or failing to raise
sufficient capital, accounting for 38% of failures.
● Three Main Reasons Businesses Need Money:
○ To start up: Covering the initial monetary investment
for property and equipment.
○ For day-to-day running: Managing working capital
for expenses like electricity, water, and salaries.
○ To expand: Developing new product ideas or
growing the business.
● Factors Influencing Funding Needs:
○ Size of the business: Larger businesses generally
require more capital and space.
○ Stage of development: New businesses often need
more capital for established benefits.
○ Length of the production cycle: Longer cycles
require more capital to cover costs until a profit is
made.
○ Stock turnover: Businesses with quick stock
turnover can generate cash flow faster.
○ Seasonality: Seasonal businesses need more
finance during off-peak seasons.
● Sources of Start-up Capital:
○ Equity: Money derived from the owner's savings, the
sale of shares (private or public), or retained profit.
○ Debt: Money borrowed that needs to be repaid, such
as from friends, bank loans, mortgages, or hire
purchase agreements.
○ Grants: Funds made available, often by the
government or NGOs, for small developing
businesses, usually one-off, and may target
disadvantaged groups or specific sectors.
○ Venture Capital: Financing obtained for a share in
the business, typically for innovative start-ups.
○ Angel Funding: Investment from wealthy
entrepreneurs in exchange for a share in the
business, often carrying a higher risk.
○ Borrowed Capital: Loans that are repaid over a
specific period, either short-term or long-term.
○ Collateral: Property or money pledged as a
guarantee for a loan.
○ Invoice: A document from the seller to the buyer for
payment.
○ Lease Agreements: Payments for using an asset for
a limited period, often with an option to purchase.
○ Microlending: Small loans offered at high-interest
rates, typically to entrepreneurs who may struggle to
secure traditional bank loans.
22.5 Lesson 4: Generating an Income
● Customer Service: Providing excellent customer service
is crucial for a business to be successful and for building
customer loyalty.
● Market Research: This is essential for identifying the
most profitable market for a product.
● Business Cycles: These are economic fluctuations that
impact a business's profitability. The cycle includes stages
like Expansion, Peak, Recession, Through, and
Recovery.