Is Your Business Financially Viable?
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Is Your Business Financially Viable?
Year 11 Business Studies Understanding Financial Success in Business New Zealand Curriculum Commerce 1.4
Learning Objectives
Explain what financial viability means in business Identify key factors affecting financial success Understand how financial viability influences business decisions Analyze simple business scenarios for viability
Key Vocabulary
Financial Viability - A business's ability to generate enough income to cover costs Revenue - Income from sales and services Fixed Costs - Expenses that stay the same (rent, insurance) Variable Costs - Expenses that change with sales volume Profit - Revenue minus total costs Break-even Point - When revenue equals costs
What is Financial Viability?
Can the business make enough money to survive? Covers all costs and expenses Generates profit for growth and sustainability Key indicator of business health Influences all major business decisions
Revenue vs. Costs: The Balance
{"left":"Revenue: Money coming IN\nSales of products\nService fees\nOther income sources","right":"Costs: Money going OUT\nRent and utilities\nStaff wages\nMaterials and supplies"}
Lemonade Stand Example
Sarah's Lemonade Stand Sells cups at $2 each Costs: Lemons $5, Sugar $3, Cups $2 = $10 total Sells 8 cups in one day Calculate: Is this financially viable?
Think and Discuss
What could threaten Sarah's lemonade stand viability? How could she improve her financial position? What decisions would you make as the business owner?
Group Activity: Case Study Analysis
Form groups of 4-5 students Analyze a fictional business scenario Calculate financial viability using provided data Identify threats and opportunities Suggest one improvement strategy Prepare 3-minute presentation
Group Presentations & Discussion
Each group presents findings (3 minutes) Share viability calculations Discuss identified risks and opportunities Compare different business scenarios Class discussion on common themes
Reflection & Key Takeaways
Financial viability determines business survival Revenue must exceed costs for sustainability Regular monitoring helps inform business decisions Every business decision impacts financial health