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Topic outline
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Resource Plus5 Financial information and decisions -
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Video transcriptHello, We’re James and Jon are planning to set up a small business. We will be setting it up as a Private Limited Company. We have both worked as Chefs in top hotels in London before deciding we would like to start a business together.
I currently make all my products at home but I need suitable premises if I am to expand production. I am unsure whether I should rent bigger premises just for more manufacturing space, look for somewhere I can manufacture that also has retail space or find separate premises to manufacture and then retail in an existing shop. What do you think?
Our business idea is designing dinner party boxes. Customers pick what type of dinner pack they would like and then customise it with the food they like. The dinner party box is delivered to our customer and they can chose to have it fully prepared or as a kit of ingredients they can assemble at home. The packs can be personalised or themed - tailoring to meet customer needs is our competitive edge.
We are aware there is a range of financial information we need to understand, and financial decisions we will need to make. But we have very little experience with this.
We would like you to meet with us and prepare a presentation to help us understand the financial aspects of setting up and running a business. We are willing to pay fees to the teams we feel have explained and helped us to understand the financial information the best.
If you have any questions, now is the time to ask your teacher. Your teacher will facilitate you throughout.
Let’s begin- the clock is ticking - you have 45 minutes to work on your meeting content. At the end of this time, you will be given 30 minutes to write your speaker notes and practise your presentation for the meeting.
This is great work, don’t forget to use your classwork and the textbook to help you – this is a challenging topic, so use resources to help you. Just remember to present in the context of our business
Remember, when you are discussing the main sources of finance available to us in the short and long term make sure they are suitable for our size and the type of business we are.
We’re just checking in to see how you are progressing. Ah lots of you working on the cash-flow forecasting section – we found this quite complicated and are looking forward to your help in understanding this. All these things to think about – there’s a lot for a new start up to learn!
Time is marching on - 20 minutes has already gone by, keep up the great work Income statements, profit, cash – it’s all a bit of muddle. Make sure you tell us the difference between profit and cash and how we can use an income statement to help with our decision making based on profit performance
We’re looking forward to having the statement of financial Position explained to us and how to interpret one and make deductions from it. We have tried to understand it but have struggled – we had no reason to understand this sort of thing when we were working as chefs
We are very pleased with what we are seeing and hearing - well done. That section on how to analyse accounts is a tricky one. We know that being able to interpret the financial performance of our business by calculating and analysing profitability ratios and liquidity ratios is important, so this is something we will need to really concentrate on in the meeting.
Only 10 minutes remain until you will be asked to start putting your presentations together. Remember to check you have covered all the elements in each of the five sections, and in the context of our business, where you can.
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