Elements of the operational aspect of the business, Key Partners, Key Activities, Key Resources, Key Partners (Elements of the operational aspect of the business), External people or businesses that support key tasks, supply goods, or help deliver the product/service. E.g. Suppliers, couriers, IT services, accountants, licensing partners, joint ventures… They evolve as strategy shifts, need to adopt new tech, or responds to legal/ethical pressures., Key Activities (Elements of the operational aspect of the business), The core tasks a business must carry out to deliver value and meet customer needs. E.g. Manufacturing, app updates, order fulfilment, customer service, marketing campaigns… They evolve as customer habits change, the business grows, or tech automates tasks., Key Resources (Elements of the operational aspect of the business), The essential assets a business needs to run effectively and compete in its market. E.g. Staff, funding, software, data systems, reputation, equipment, licences… They evolve as resources age, the business expands, or digital tools replace older systems., Fixed Costs (Elements of the operational aspect of the business), Costs that stay the same each month regardless of output. E.g. Rent, insurance, manager salaries. They change when the business grows, moves, or restructures long-term commitments., Variable Costs (Elements of the operational aspect of the business), Costs that rise and fall depending on how much is produced or sold. E.g. Raw materials, electricity, wages. They grow as output increases but can drop per unit with bulk buying or better deals., Revenue Streams (Elements of the operational aspect of the business), Ways a business earns income from its products or services. E.g. Product sales, subscriptions, licensing. They change as customer habits shift, digital tools open new options, or the business expands., Short-term finance (Elements of the operational aspect of the business), Money borrowed for under 1 year to cover everyday costs. Types: Bank overdraft, trade credit, accrued expenses, factoring. Uses: Stock, wages, bills, short-term gaps in cashflow., Medium-term finance (Elements of the operational aspect of the business), Borrowed for 1–5 years, used to fund assets that last a few years. Types: Term loan, leasing, hire purchase. Uses: Equipment, vehicles, IT systems., Long-term finance (Elements of the operational aspect of the business), Funding used for 5+ years to support large-scale business growth. Types: Long-term loan, debenture, equity, venture capital, retained earnings, grants. Uses: Buying premises, scaling up, entering new markets., Cashflow Definition (cashflow forecast), Projection of money coming in and out to make sure the business can meet its payments., Net cash (cashflow forecast), Total receipts minus total payments in a month., Opening cash (cashflow forecast), The cash available at the start of the month., Closing cash (cashflow forecast), Opening cash + Net cash = cash left at the end of the month., Closing cash surplus (cashflow forecast), Positive closing cash, enough money left at month end to cover costs., Closing cash deficit (cashflow forecast), Negative closing cash, not enough money to make payments., Issues that arise (cashflow forecast), Fall in sales for a period e.g. a seasonal business. One off spending e.g. purchase of new equipment / delivery van, Recommending actions for a deficit (cashflow forecast), 1. Spread large costs over time using loans or leasing rather than paying one large lump sum. 2. Run a promotion or sell stock to raise quick cash. 3. Cut spending where possible e.g. switch to cheaper suppliers. 4. Arrange short-term finance (e.g. overdraft) to cover deficits so they can make payments

Chapter 10 Key Takeaways

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