6.2 - Business Growth Flashcards
(8 cards)
What are the advantages of external (inorganic) growth?
Competition can be reduced
Market share can be increased overnight
What are the disadvantages of external (inorganic) growth?
It can be expensive to takeover/merge with another business
Manages may lack experience to deal with the other business
What are the advantages of a public limited company?
The business has the ability to raise additional finance through share capital
Shareholders have limited liability
What are the disadvantages of a public limited company?
Expensive to set up - minimum of £50k
Greater risk of a hostile takeover
What are the advantages of retained profit?
Its quick and easy to access the money
What is the advantage for selling business assets?
Clears space
Quick to get rid of
What is the disadvantage for selling business assets?
Business might not get the full market value
Business might actually need it in the future
What are three sources of internal finance?
Retained profit
Selling assets
The owners savings
