Case Study: Finance And Accounting At The Core Of Entrepreneurship PDF

Ca e Study: Fi a ce A d Accou ti g At T e Core Of E trepre eur ip This case study explores how finance and accounting principles guide entrepreneurs in making strategic decisions and managing their businesses effectively. It focuses on two entrepreneurs: Jakub Nowakowski, running a delivery business...

Ca e Study: Fi a ce A d Accou ti g At T e Core Of E trepre eur ip This case study explores how finance and accounting principles guide entrepreneurs in making strategic decisions and managing their businesses effectively. It focuses on two entrepreneurs: Jakub Nowakowski, running a delivery business in Manchester, and Samira Rahman, managing a catering business in London. Their experiences showcase the central role of financial planning and accounting in driving business success. C aracter 1 Jakub Nowakow ki 2 Sa ira Ra a A 30-year-old Polish male entrepreneur running A 33-year-old Bangladeshi female entrepreneur SpeedLink, a small delivery business in managing Savory Moments, a catering business Manchester. in London specialising in home-style meals for events. Sce ario Overview Jakub and Samira are entrepreneurs with practical expertise from their previous roles but face challenges that highlight the central role of finance and accounting in their business operations. Their experiences showcase how financial planning and managerial decisions, informed by accounting data, drive business success. Jakub: Fi a ce At T e Ce tre Of Productio A d Prici g Deci io Jakub's delivery business has grown steadily, but he faces challenges in aligning production levels, pricing, and profitability. Curre t Situatio Jakub recently secured a large delivery contract requiring him to increase the number of deliveries per day. He must decide whether to hire additional drivers and lease vehicles or manage the increased demand with his current resources. He worries about balancing increased operational costs with the profitability of the contract. His current pricing strategy needs adjustment to ensure a sufficient markup margin after covering rising variable costs like fuel and maintenance. Key Fi a ce Focu for Jakub 1 Bala ci g Productio 2 Prici g for Profit 3 Ma agerial Level a d U it Co t Maxi i atio I plicatio Jakub learns how economies Understanding the interplay The decision to scale of scale can help reduce per- between costs, pricing, and operations involves assessing delivery costs if he increases market competition to cost structures and the capacity effectively. ensure his pricing strategy financial risks of expansion. covers costs and delivers a strong profit margin. Reflectio Que tio for Jakub 1 Co t A aly i for Ve icle Lea i g 2 Prici g Strategy Adju t e t How can Jakub use cost analysis to determine What steps can he take to adjust his pricing to whether leasing additional vehicles is financially ensure profitability while staying competitive? viable? Sa ira: Accou ti g A A Tool For Ma agi g Fi a cial Bala ce Samira's catering business has grown popular, but she struggles to maintain accurate financial records, leading to inefficiencies in managing resources and customer orders. Curre t Situatio Samira has started receiving larger orders that require precise tracking of expenses like ingredients, labour, and equipment use. However, her inconsistent record-keeping has caused discrepancies in her calculations of profit and costs. She is uncertain about how to use her accounting records to forecast future needs and ensure the financial health of her business. She struggles with errors in recording transactions, which have led to issues with managing customer payments and supplier invoices. Key Accou ti g Focu for Sa ira 1 Accou ti g Equatio 2 Tra actio 3 Ma agerial I ig t i Practice Recordi g a d fro Accou ti g Using the principle of Assets = Mo itori g Leveraging financial Liabilities + Equity to Accurate recording of income statements (e.g., balance understand her business's and expenses to avoid errors sheets) to make informed financial position at any and maintain financial decisions about purchasing given time. balance. supplies and planning for seasonal demand. Reflectio Que tio for Sa ira 1 I provi g Tra actio Recordi g 2 U i g Accou ti g Record for How can Samira improve her transaction Foreca ti g recording process to reduce errors and How can she use her accounting records to discrepancies? predict future resource needs and manage costs more effectively? Le o For Stude t a d Pre-Lecture Reflectio Que tio This case study focuses on how finance and accounting principles guide entrepreneurs like Jakub and Samira: Fi a ce Accou ti g Strategic decisions around production, pricing, and Accurate recording and monitoring of transactions cost control. to ensure financial stability. Using financial planning to optimise operations Insights from accounting data to support and maximise profit margins. decisions and comply with financial obligations. Pre-Lecture Reflectio Que tio 1. Why is it essential for Jakub to consider production levels, unit costs, and pricing together? 2. How does the accounting equation help Samira maintain balance in her financial records? 3. What similarities can you see between finance and accounting as tools for improving decision-making in a small business? This case ties finance and accounting concepts from the week into relatable entrepreneurial challenges, helping students connect theory with practical application.