Internal Business Environment and Planning (VCE SSCE Business Management): Flashcards
📚Flashcards
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Goodwill definition
Goodwill definition
Premium paid above net asset value for reputation & relationships
Intangible assets
Intangible assets
Assets lacking physical substance, e.g. patents, trademarks
Purchasing business: start-up time benefit
Purchasing business: start-up time benefit
Immediate revenue generation from existing operations
Purchasing business: finance benefit
Purchasing business: finance benefit
Historical records & cash flow help secure loans easier
Purchasing business: valuation risk
Purchasing business: valuation risk
Intangible assets & goodwill difficult to value precisely
Purchasing business: reputation risk
Purchasing business: reputation risk
Poor reputation ('bad will') inherited from previous owner
New business: control advantage
New business: control advantage
Total freedom to shape concept, brand, & operations
New business: cost advantage
New business: cost advantage
No goodwill premium paid, only tangible assets & direct costs
New business: cash flow challenge
New business: cash flow challenge
Building customer base takes time; may operate at loss initially
New business: finance challenge
New business: finance challenge
No track record makes lenders cautious, harder to secure funding