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Summary AQA Business A Level - Year 1 Revision Guide (Chapters 1-6) $40.46
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  7. Unit 1 BUSS1 - Planning and Financing a Business

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Summary AQA Business A Level - Year 1 Revision Guide (Chapters 1-6)

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  • Course
  • Unit 1 BUSS1 - Planning and Financing a Business
  • Institution
  • AQA

I created this revision guide myself during Year 12 to use for Year 12/13 mocks and my A-Level Business examinations which I was due to take in May/June 2020. This includes is everything you need to know from formulas and key terms to models and theories. Please note, that this is only Year 1 Conte...

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  • August 31, 2020
  • 48
  • 2019/2020
  • Summary

Subjects

  • business
  • a level business

Written for

  • A/AS Level
  • AQA
  • Business Subjects
  • Unit 1 BUSS1 - Planning and Financing a Business
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YEAR 1 - A level Business
Studies Revision Guide




1. W
​ hat is business?

2. Managers, leadership and decision making

3. Decision making to improve marketing performance

4. ​Decision making to improve operational

performance

5. Decision making to improve financial performance

6.Decision making to improve human resource

performance




By Hadiqa Akram

,Chapter 1 - What is Business?
Business Objectives

Why do businesses exist

1. Survival​ - a priority for a business (⅓ of businesses fail after 3
years)
2. Profit​ ​optimisation
Profit​ ​maximisation
3. Growth​ - raising their customer base
4. Cash Flow​ - keep in the black not the red
5. Social and ethical objectives ​- only if a business sacrifices profit or share

Business objectives -​ targets that a business wants to achieve within a given time period

The measurement and importance of profit

Fixed costs​ - costs that don’t vary with output e.g rent or salaries

Variable costs​ - costs that vary with levels of output e.g raw materials


Profit = total revenue - total costs
Sales revenue = quantity sold x selling price
Total costs = fixed costs + total variable costs

Importance of profit

- One of the main incentives of running a business
- Source of finance
- Measure of success
- Can be reinvested to help business grow
- Attracts stakeholders

Profit​ - what is left after all costs have been deducted from the revenue
Revenue ​- the value of sales made during a trading period.



Cash flow

Cash flow ​- the movement of money in and out of a business in terms of expenditure and
income.

,Missions and objectives

Mission statement ​ - sets out the business’s overall purpose to direct and stimulate the entire
organisation




Different forms of business

Sole​ ​trader​ - when a business has only 1 owner


PROS CONS
● Autonomy in decisions ● Unlimited liability
● Can keep all of profits + chose what ● Harder to make decisions
they do with them ● Potential lack of capital
● Flexibility + control ● Limited chance of growth in
● Easier to set up/ run comparison to other forms




Public limited company​ - when a business offers shares to the public


PROS CONS
● Limited liability ● More regulations
● Better access to capital ● Not easy to set up
● Can take over other businesses ● Potential loss of control of the business
● Shareholders only lose what they invest ● Pressure to pay dividends to s.h

, Private limited company ‘ltd’ -​ a business owned by shareholders and run by directors


PROS CONS
● Limited liability ● Slows the decision making process
● Can raise finances through the sale of ● Disclosure of financial information
shares to friends/family ● More regulations
● Separate legal entity from owners


Mutual businesses -​ no shareholders or owners, exist solely to benefit their members
Charities​ - non for profit organisations which are exempt from tax

The role of shareholders

Shareholder ​ ​- owns a share in the company to make a profit (return) on their investment, can
influence decision making in companies/invited to AGM’s and able to vote on policies.

There are 2 main financial rewards :
1. Annual dividend payments
2. A rise in the value of shares


Influences on share prices and significance

Share prices are affected by performance and the business environment that it trades within.
Influences include:
- Job losses
- Increased profits
- Economic downturn (boom/ recession)


Rise in share prices Fall in share prices

- Managers get bonuses - Company vulnerable to takeover
- Easier to gain capital - Indication of weak performance
- Boosts shareholders confidence - Difficult to generate capital
- Businesses may receive publicity - Shareholders less confident to spend



Factors influencing costs and demand

- Competition + Market conditions
- Income + Interest rates
- Demographic + Environmental factors
- Fair trade - trade between companies in developing countries, were fair prices are paid to the
producers

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