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GCSE Business Edexcel > 1 > Flashcards

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1
Q

Why do new business ideas come about?

A

🟡products become obsolete
🟡changes in technology
🟡change in customer wants

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2
Q

Hat are the two types of business ideas

A

💡 adapting an existing product

💡original ideas

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3
Q

What are some risks of starting a new business?

A

🔹Failure
🔹Financial loss
🔹Lack of security

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4
Q

What may be some rewards for entrepreneurs?

A

🔵purse an interest
🔵dissatisfaction with current job
🔵financial rewards
🔵be their own boss

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5
Q

What purpose do businesses serve?

A

🟣goods
🟣services
🟣goods & services eg:Restaurants
🟣 delivery

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6
Q

What do businesses do serve..

A

🟤peoples wants
🟤peoples needs

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7
Q

What is enterprise?

A

🔴a business
🔴qualities
🔴factor of production
(Entrepreneurial activity)

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8
Q

How can value be added to a product ?

A

🔸quality
🔸USP
🔸convenience
🔸branding
🔸design

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9
Q

What are some ways to minimise risks?

A

Market research
Revenue forecasts

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10
Q

Branding

A

🔺defines it’s values
🔺creates customer loyalty , which can increase market share
🔺🔺🔺🔺

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11
Q

E-commerce/M commerce

A

🟡low start up costs
🟡ideas straight to the marketplace
🟡do not need their own payment platform

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12
Q

What quality does an entrepreneur hold?

A

🔷taking risks
🔷identifying business opportunities

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13
Q

What are some roles of an entrepreneur ?

A

🟣innovation
🟣organised
🟣willingness to take risks
🟣hardworking

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14
Q

What are the 4 factors of production?

A

◾️enterprising
◾️capital
◾️land
◾️labour

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15
Q

What are some customer needs?

A

🟢convenience
🟢quality
🟢price
🟢choice

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16
Q

What is the importance of satisfying customer needs?

A

🔹they will buy
🔹increase in sales and customer satisfaction

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17
Q

What are some advantages of being market driven?

A

🟡avoid costly mistakes
🟡find the correct marketing mix
🟡allows them to be competitive

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18
Q

What is found in market research?

A

🔴demand
🔴competition
🔴target market

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19
Q

What is qualitative research?

A

Opinions and written stuff

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20
Q

What is quantitative research?

A

Factual quantified information

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21
Q

What is market segmentation?

A

Dividing potential customers into different groups

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22
Q

Why do business use market segmentation?

A

⚫️choosing a marketing mix
⚫️choosing promotion
⚫️market mapping

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23
Q

What are variables in segmentation?

A

🟦age
🟦location
🟦income
🟦gender

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24
Q

Why is market mapping used

A

To identify a gap in the market by looking at what competitors have to offer

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25
What can businesses compete on?
🟣location 🟣product range 🟣customer service 🟣price
26
Why is the impact of high competition?
Price Quality
27
What is primary research?
Market research that is done by it’s own firm for its own use. The research can tailor the business’s exact needs
28
What are examples of primary research?
🔹the likert scale 🔹questionnaires, surveys , interviews
29
What is secondary market research ?
A firm collecting information on research that has been performed by other people. It is used for an entire market and is cheap
30
What is the difference between an aim & an objective
Aim = ultimate purpose Objective =goals in order to achieve the aim An objective is normally more specific
31
Name some aims
Survival Profit maximisation Maximise shareholder value (business worth)
32
Name some objectives
Increase market share Growth Customer satisfaction Social and ethical objectives
33
What influences a firm’s objectives
🟨type of business 🟨size 🟨competition
34
What is revenue?
Source of income earned by the sales Number of sales✖️sale price
35
What are fixed costs?
Costs that do not vary as the company changes it’s output Eg: rent, insurance, salaries
36
What are variables costs?
Costs that change directly with output Eg: wages for factory labour, raw material, transport costs
37
What is profit?
The amount of money a business makes taking costs into account Profit= revenue➖total costs
38
Total costs
= fixed costs➕variable costs
39
What is average unit cost?
Total cost ➗number of units produced
40
What is interest?
Extra amount you pay in the loan Interest =interest rate✖️size of the loan
41
What is the break even point?
The revenue = total cost’s
42
What is the margin of safety?
The gap between the actual output and the break even point
43
What are limitations to the break even analysis?
🟤assumes the amount of sales 🟤assumes the firm will not change the price when output changes
44
What is cash inflow and outflow
The the cash coming into the business. The cash going out of the business
45
What is net cash flow?
Cash inflow ➖cash outflow
46
What is opening balance?
The amount of cash that the business starts to trade with
47
What is closing balance?
The amount of cash that the bush finished trading with Closing balance = opening balance ➕net cash flow
48
What is a liquidity problem?
Business runs out of cash in the short term
49
What are the consequences of cash flow problems?
Won’t be able to pay: 🔹creditors (people who give loan) will charge a higher invest in the future 🔹suppliers relationship 🔹employees might leave
50
How can you solve cash flow problems?
🟤increase cash inflows, more sales, sell assets 🟤reduce outflows, delay 🟤reschedule payments
51
What are some short term methods of finance?
🟪trade credit, delaying payment 🟪hire purchases, pay in Installment 🟪overdraft 🟪🟪
52
What are some long term methods of finance?
🟢share capital (sell shares for money 🟢retained profit 🟢loans/mortgages 🟢crowdfunding 🟢venture capital, 🟢personal savings
53
What are some advantages for sole traders?
✔️easy to set up ✔️be your own boss ✔️gets all profit ✔️control
54
What are some disadvantages of being a sole trader?
❌have to make decisions alone ❌hard to raise finance ❌hard to retain employees
55
What are some advantages of partnerships?
✔️more experience /ideas ✔️easier to raise money ✔️good employees can be retained
56
What are some disadvantages of partnerships?
❌shared profit ❌disagreements ❌taking responsibility for other’s faults
57
What are limited companies?
Businesses owned by shareholders. Only legally responsible for the amount they have invested
58
What is a private limited company?
Ownership of shares is restricted , owners have a lot of control. There is an upfront fee however
59
What are public limited companies?
They sell their shares on the stock exchange, very fast growth. However owners do it have a large say
60
What is unlimited liability?
You can lose more than you invested including personal assets. Eg: sole traders and partnerships
61
What are some advantages and disadvantages of limited liability?
✅Easier access to finance ❌need to incorporate which can be expensive/time consuming
62
What is an unincorporated association?
A non profit organisation but with unlimited liability
63
What is franchising?
When a company gives someone the right to sell its products and use it’s trademark for a fee
64
What are some advantages and disadvantages of franchising?
❌do not have full control ❌have to pay a fee ✅increases brand awareness ✅marketing and brand name already established ✅do not need large amounts of investment
65
What factors affect the business location?
🟣available of raw material 🟣labour nationally 🟣labour internationally 🟣competition 🟣rent 🟣location of the market
66
What are the marketing mix ?
🅿️rice 🅿️roduct 🅿️romotion 🅿️lace
67
Why do businesses create plans?
🔴important for new business 🔴raising finance 🔴setting objectives 🔴business organisation
68
What are the main features of a business plan?
🔹mission statement 🔹products/services 🔹market analysis 🔹organisation and management team 🔹production details 🔹finance 🔹summary
69
How do you calculate break even?
Fixed costs ➗(selling price ➖fixed costs)
70
How do changes in technology provide new business opportunities?
🔺they make expensive technology affordable 🔺social media 🔺e commerce /m commerce
71
How is expensive technology becoming affordable beneficial for entrepreneurs?
The new technologies can be used in the company’s products and services. Reducing the costs for manufacturing
72
How is E and M commerce beneficial to entrepreneurs?
The barriers/risks for starting a business have decreased , as rent for a physical place is not required. Instead new business ideas can be brought straight to the market place.
73
How is social media beneficial to entrepreneurs?
Inexpensive way to promote a business, interacting with existing and potential customers. Reduce the work involved in marketing.
74
How do businesses keep up to date with the changes in consumer wants?
Surveys , feedback questionnaires, data, demographic data
75
Why might a business adapt one of it’s existing products?
Cultural reasons(vegan burgers) , new trends (changing colour of clothes),
76
What is meant by the dynamic nature of a business?

GCSE Business Edexcel (9 decks)

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