Business Finance PDF

WHAT IS BUSINESS?  WHAT IS BUSINESS? Business is an economic activity that involves the exchange, purchase, sale or production of goods and services with a motive to earn profits and satisfy the needs of customers. Businesses can be both profit or non-profit organizations that function to g...

WHAT IS BUSINESS?  WHAT IS BUSINESS? Business is an economic activity that involves the exchange, purchase, sale or production of goods and services with a motive to earn profits and satisfy the needs of customers. Businesses can be both profit or non-profit organizations that function to gain profits or achieve a social cause respectively. WHAT IS FINANCE? WHAT IS FINANCE? Finance is about managing your money — knowing what’s coming in and going out. By understanding your business finances, you can make smart decisions about where to spend your money and make sure you’re earning enough to keep your business running. BME 114 : BUSINESS FINANCE DEFINITION OF BUSINESS FINANCE Business finance is the funding a business needs for commercial purposes. It is the money business owners require to start, run, or expand a business. Finance is the foundation of any business. It is nearly impossible to succeed without strong finances in place. You use finance to purchase assets, goods, and raw materials. Essentially anything that will push your business forward. This is why finance and funds are known as the lifeblood of any business. You simply cannot function properly unless you have an adequate amount of money accessible to you and your business. 5 IMPORTANT PURPOSE OF BUSINESS FINANCE 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance  Financial Statement When dealing with business finance, it’s important to go through your financial statements, including your profit-and-loss statement, balance sheet, and cash flow statements. Combined, these reports provide an overview of your business’s financial performance. By doing a financial analysis of these statements, you can see whether you have enough working capital. If there’s a shortage, you’ll get insights as to why, so you can start on strategies to correct it. 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance  Strategic Planning Every business should have a solid strategy in place. This is used for planning and providing the financial groundwork for your projections and plans. If you are looking to expand your business, you will use business finance to tell you how much you’ll have to spend to get things moving. These strategic plans help you to determine whether or not your company is meeting its long and short-term goals. 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance  Borrowing Money It’s not uncommon to run into cash flow difficulties. When this happens, business finance is a vital tool for managing and understanding the financial implications of borrowing money. By incorporating this information into your financial data, you can make more educated decisions about how much capital to borrow. You can also decide which options make the most sense and your repayment schedule. 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance  Promotion It’s all well and good to have a great product and business model but to be a successful business, you need people to be aware of you. The best way to do this is through promotion and marketing. There is a large demand for market research, so most of the time, this does not come cheap. So it’s important to set aside a section of your profits to hire a marketing manager who can ensure your product is accessible and appealing to your target market. 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance 5 IMPORTANT PURPOSE OF BUSINESS FINANCE Financial Statement Strategic Planning Borrowing Money Promotion Managerial Finance  Managerial Finance Management accounting and financial planning can help you forecast better and make financial decisions that reduce risk and support the growth of the business. FINANCIAL INSTITUTION It’s all well and good to have a great product and business model but to be a successful business, you need people to be aware of you. The best way to do this is through promotion and marketing. There is a large demand for market research, so most of the time, this does not come cheap. So it’s important to set aside a section of your profits to hire a marketing manager who can ensure your product is accessible and appealing to your target market. THANK YOU FOR LISTENING