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Description
Flashcards by Sophie Froud, updated more than 1 year ago
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Created by Sophie Froud
almost 8 years ago
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| Question | Answer |
| What is a business? | A business is an organisation that provides goods or a service to customers in return for money |
| Why do businesses exist? (bullet point reasons) | -to provide goods and services -to please the public -to make money -to help others |
| Why start your own business? (bullet point reasons) | -you can be your own boss -you can keep all the profit -own work hours -employ who you like -improve as a person -nobody will "mess up" |
| What are the three business sectors? | Primary Sector Secondary Sector Tertiary sector |
| What is the primary sector? | An organisation at the first stage of production |
| What is a secondary sector? | An organisation at the second stage of production - the use of primary resources to convert them into products |
| What is the tertiary sector? | Organisations that provide services |
| What is a franchise? | A franchise occurs when a franchiser sells the name, logo and products of an established business for franchiser use. |
| What is a franchisor? | The seller of a franchise |
| What is a franchisee? | The buyer of the franchise |
| What are the advantages of buying a franchise? | -it reduces the risk of setting up a business -it's easier to get customers because it's an established business name. --the franchisor provides support , training and existing methods. -some costs can be shared by franchises. |
| What are the disadvantages of buying a franchise? | -if there's a problem with one franchise, this will reflect badly on the other franchises. -there may be disputes between the franchisee and the franchisor over balance of power |
| What is a niche? | An identified need that hasn't been met |
| What is an objective? | An objective is a target that is set for a business or person to achieve |
| What are the types of business aims? | -Survival -Earning a profit -Customer satisfaction -Market share -Being ethical -environmental & sustainability |
| What is a stakeholder? | A stakeholder is a person who affects or is affected by the activities of a business |
| What is a business plan? | A business plan is a document setting out what the business does in present, plus what it aims to do in the future and how this will happen. |
| What goes into a business plan? | -personal details -mission statement -analysis of the market -product description -production details -staff requirements -finance |
| Why is a business plan important? | -it helps anticipate any problems so the business will be able to better deal with the problem in the future -helps the business to make the right decisions -it'll help to stick with the money that you need and not spend more |
| What are the difficulties of business planning? | -uncertainty- difficult to predict exactly what'll happen -lack of experience- bigger businesses can use experts -not enough time -lack of detail |
| What is a sole trader? | A business that is both owned and controlled by one person |
| What is a partnership? | An agreement between two-twenty people to be responsible for a business and share profits and risks |
| What is a private limited company? | A relatively small business that offers limited liability to it's shareholders - e.g. if a company goes bankrupt only business assets are lost |
| What is unlimited liability? | When the owners are responsible for all debts |
| What are the advantages of a sole trader? | -own boss -self employed -total control -easiest way to set up a business -makes a lot of profit |
| What are the disadvantages of a sole trader? | -lots of responsibility -lots of liability on debts |
| What are the advantages of a partnership? | -it's easier to expand the business as there's more money between owners -easier to set up with more people -you get to work with the people you like |
| What are the disadvantages of a partnership? | -any argument could split up the business -it's harder to spread costs between everyone involved |
| What are the advantages of a private limited company? | -control of customers cannot be lost to outsiders -some see these as having a higher status -people are prepared to risk their money - shareholders have limited liability |
| What are the disadvantages of a private limited company? | -profits are shared among members -cannot sell shares to the public -loss of individual control -legal procedure to set up |
| What is a dividend? | Money received by shareholders from profit made by the business - e.g. if a shareholder owns 10% of a business, the dividend is 10% of the profit. |
| What is a capital? | The money required to start the business from scratch |
| Why is location important to a business? | It's important because it affects whether people will come to your business or not as well as many other factors. |
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