Stages in the growth of a business
A1 Sources of finance
Features of the main sources of internal and external business finance and their advantages and disadvantages.
- Internal sources of finance, including owner’s capital, retained profit and the sale of assets.
- The importance of net current assets.
- External sources of finance distinguished between long-term, medium-term and short-term:
- long-term sources of finance, including mortgages, shares and debentures
- medium-term sources of finance, including leasing, hire purchase, bank loans, peer-to-peer lending and venture capital
- short-term sources of finance, including bank overdrafts, crowdfunding, debt factoring, invoice discounting and trade credit.
A2 Sources of revenue
Features of the main sources of revenue received by a business and factors that influence the amount received from each source of revenue.
- Revenue received from selling activities, including cash sales and credit sales.
- Revenue received from supplementary activities, including rental income, interest payments on deposits and commission received (e.g. social media).
A3 Business finance and types of business
The relationship between business finance and the characteristics of a business, its objectives and the stage in its development.
- Types of business and the stages in their development to include: start-up, sole trader partnerships, private and public limited companies.
- Business objectives to include: expansion, product development, market development and relocation.
