1. Topic 1.3

2.  This topic considers the practicalities of making a business idea happen.  What are the objectives in setting up?  What are the qualities of an successful entrepreneur?  How estimates of revenue, costs, profit and cash flow forecasts fit into a business plan.  What sources of finance are available to a start up business.

3. By the end of this unit you will:-  Understand a range of financial ‘start up’ objectives such as profit, income, financial stability and wealth.  Understand a range of possible non financial objectives such as personal satisfaction and challenge.  Be able to distinguish between the objectives of a profit-making start up and a social enterprise.

4.  Financial objectives – targets expressed as money.  Profit, earning income, wealth.

5. There are different objectives when setting up a business and they will vary depending on the type of business that is being set up.  Financial Objectives – ones related to money, profit, wealth, income, financial security etc  Non financial objectives – such as personal satisfaction, challenge, independent control or helping others.

6.  Survival – Many businesses fail with in the first year, so to start with a business may just have the objective of survival. It takes time to build up a business, a base of customers.  The start up of a business is expensive as you need to buy any equipment.  Renting or buying premises cost money.  If a business survives it can then achieve longer term financial objectives.

7.  Profit - people who start up businesses have already realised that they may have to take a cut in salary or have a low income for a while.  They are motivated to do this by the thought of higher income as the business grows.  The business will pay them a wage but they will also get to keel all the profits.

8.  Wealth – if a business is successful it will generate wealth – the monetary value of the business if it is sold.  A successful business does not only mean the owners would earn more money but that they would also become wealthier.

9.  Financial Security – Owning a business carries risk.  What would happen if the business lost customers? What would happen if the costs shot up? These are also risks if you are employed by someone else!  Owning your own business can give greater financial security – a long term objective

10.  There are other reasons, as well, or instead of Financial objectives that businesses are set up.  These are non financial objectives.

11.  Personal Satisfaction – entrepreneurs feel proud and get a sense of achievement from having a successful business.  Building a business can be exciting,  And provide personal satisfaction.

12.  Challenge – creating a successful business from scratch, for some people is the ultimate business challenge.  Many entrepreneurs find the challenge of running a business very satisfying and rewarding.

13.  Independence and Control – Are key factors for some people.  You can be your own boss, be responsible for the business, not having to check with anyone else.  There is more flexibility to organise the work and lives around their work

14.  Helping Others – some people are happy and satisfied by the fact that they have helped someone else and ‘made a difference.  Charities or Social enterprises are the types of enterprise that help people.

15.  Task  Draw a mindmap to show what you would consider to be the objectives, both financial and non financial.  See if you can think of any other objectives for a start up business.