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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
Q

What can businesses compete on?

A

🟣location
🟣product range
🟣customer service
🟣price

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26
Q

Why is the impact of high competition?

A

Price
Quality

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27
Q

What is primary research?

A

Market research that is done by it’s own firm for its own use. The research can tailor the business’s exact needs

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28
Q

What are examples of primary research?

A

🔹the likert scale
🔹questionnaires, surveys , interviews

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29
Q

What is secondary market research ?

A

A firm collecting information on research that has been performed by other people.
It is used for an entire market and is cheap

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30
Q

What is the difference between an aim & an objective

A

Aim = ultimate purpose
Objective =goals in order to achieve the aim
An objective is normally more specific

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31
Q

Name some aims

A

Survival
Profit maximisation
Maximise shareholder value (business worth)

32
Q

Name some objectives

A

Increase market share
Growth
Customer satisfaction
Social and ethical objectives

33
Q

What influences a firm’s objectives

A

🟨type of business
🟨size
🟨competition

34
Q

What is revenue?

A

Source of income earned by the sales
Number of sales✖️sale price

35
Q

What are fixed costs?

A

Costs that do not vary as the company changes it’s output
Eg: rent, insurance, salaries

36
Q

What are variables costs?

A

Costs that change directly with output
Eg: wages for factory labour, raw material, transport costs

37
Q

What is profit?

A

The amount of money a business makes taking costs into account
Profit= revenue➖total costs

38
Q

Total costs

A

= fixed costs➕variable costs

39
Q

What is average unit cost?

A

Total cost ➗number of units produced

40
Q

What is interest?

A

Extra amount you pay in the loan
Interest =interest rate✖️size of the loan

41
Q

What is the break even point?

A

The revenue = total cost’s

42
Q

What is the margin of safety?

A

The gap between the actual output and the break even point

43
Q

What are limitations to the break even analysis?

A

🟤assumes the amount of sales 🟤assumes the firm will not change the price when output changes

44
Q

What is cash inflow and outflow

A

The the cash coming into the business. The cash going out of the business

45
Q

What is net cash flow?

A

Cash inflow ➖cash outflow

46
Q

What is opening balance?

A

The amount of cash that the business starts to trade with

47
Q

What is closing balance?

A

The amount of cash that the bush finished trading with
Closing balance = opening balance ➕net cash flow

48
Q

What is a liquidity problem?

A

Business runs out of cash in the short term

49
Q

What are the consequences of cash flow problems?

A

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
Q

How can you solve cash flow problems?

A

🟤increase cash inflows, more sales, sell assets
🟤reduce outflows, delay
🟤reschedule payments

51
Q

What are some short term methods of finance?

A

🟪trade credit, delaying payment
🟪hire purchases, pay in Installment
🟪overdraft
🟪🟪

52
Q

What are some long term methods of finance?

A

🟢share capital (sell shares for money
🟢retained profit
🟢loans/mortgages
🟢crowdfunding
🟢venture capital,
🟢personal savings

53
Q

What are some advantages for sole traders?

A

✔️easy to set up
✔️be your own boss
✔️gets all profit
✔️control

54
Q

What are some disadvantages of being a sole trader?

A

❌have to make decisions alone
❌hard to raise finance
❌hard to retain employees

55
Q

What are some advantages of partnerships?

A

✔️more experience /ideas
✔️easier to raise money
✔️good employees can be retained

56
Q

What are some disadvantages of partnerships?

A

❌shared profit
❌disagreements
❌taking responsibility for other’s faults

57
Q

What are limited companies?

A

Businesses owned by shareholders.
Only legally responsible for the amount they have invested

58
Q

What is a private limited company?

A

Ownership of shares is restricted , owners have a lot of control.
There is an upfront fee however

59
Q

What are public limited companies?

A

They sell their shares on the stock exchange, very fast growth. However owners do it have a large say

60
Q

What is unlimited liability?

A

You can lose more than you invested including personal assets.
Eg: sole traders and partnerships

61
Q

What are some advantages and disadvantages of limited liability?

A

✅Easier access to finance
❌need to incorporate which can be expensive/time consuming

62
Q

What is an unincorporated association?

A

A non profit organisation but with unlimited liability

63
Q

What is franchising?

A

When a company gives someone the right to sell its products and use it’s trademark for a fee

64
Q

What are some advantages and disadvantages of franchising?

A

❌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
Q

What factors affect the business location?

A

🟣available of raw material
🟣labour nationally
🟣labour internationally
🟣competition
🟣rent
🟣location of the market

66
Q

What are the marketing mix ?

A

🅿️rice
🅿️roduct
🅿️romotion
🅿️lace

67
Q

Why do businesses create plans?

A

🔴important for new business 🔴raising finance
🔴setting objectives
🔴business organisation

68
Q

What are the main features of a business plan?

A

🔹mission statement 🔹products/services
🔹market analysis
🔹organisation and management team
🔹production details
🔹finance
🔹summary

69
Q

How do you calculate break even?

A

Fixed costs ➗(selling price ➖fixed costs)

70
Q

How do changes in technology provide new business opportunities?

A

🔺they make expensive technology affordable
🔺social media
🔺e commerce /m commerce

71
Q

How is expensive technology becoming affordable beneficial for entrepreneurs?

A

The new technologies can be used in the company’s products and services. Reducing the costs for manufacturing

72
Q

How is E and M commerce beneficial to entrepreneurs?

A

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
Q

How is social media beneficial to entrepreneurs?

A

Inexpensive way to promote a business, interacting with existing and potential customers. Reduce the work involved in marketing.

74
Q

How do businesses keep up to date with the changes in consumer wants?

A

Surveys , feedback questionnaires, data, demographic data

75
Q

Why might a business adapt one of it’s existing products?

A

Cultural reasons(vegan burgers) , new trends (changing colour of clothes),

76
Q

What is meant by the dynamic nature of a business?

A

GCSE Business Edexcel (9 decks)

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