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Business JSL > 1 > Flashcards

1 Flashcards

1
Q

What is a sole trader/proprietor

A

A business controlled by 1 owner

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2
Q

Advantages of a sole trade

A
  • Full Control

- Receive all profits

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3
Q

Disadvantages of sole trader

A
  • Unlimited liability

- Limited capacity to raise capital

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4
Q

What is a partnership

A

Business owned by 2 or more people

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5
Q

Advantages of a partnership

A
  • Share ideas/offer different skills

- higher initial capital

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6
Q

Disadvantages of partnership

A
  • Disagreements/conflict

- Have to share profit

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7
Q

What is unlimited liability

A

Being responsible for all the debts of the business

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8
Q

what is a Limited liability partnership

A

A legal partnership where all partners have limited liability

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9
Q

what is a Deed of partnership

A

A document containing an agreement that details the rights and obligations of each partner

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10
Q

What is sleeping partner

A

Someone who invests but does not take part in day to day activity (limited partner)

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11
Q

What is a private limited company

A

Business owned by shareholders who are family or friends, and ran by a board of directors

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12
Q

Advantages of Ltd

A
  • Limited liability for shareholders

- Continuity

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13
Q

Disadvantages of Ltd

A
  • Complicated to set up

- Accounts have to be public

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14
Q

What is a public limited company

A

Business that is owned by shareholders (public), and is ran by board of directors

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15
Q

Advantages of Plc

A
  • Greater ability to raise finance

- More publicity

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16
Q

Disadvantages of Plc

A
  • Pressure from shareholders

- Greater threat of takeover

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17
Q

What is a franchise

A

A firm that offers its brand, products, training etc for use in return for royalty payments

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18
Q

Advantages of a franchise

A
  • Free brand exposure

- Training included

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19
Q

Disadvantages of franchise

A
  • Royalty payments

- Lack of Control

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20
Q

What is meant by the public sector

A

Services that are provided by the national or local government, funded by tax

21
Q

What is meant by the private sector

A

Services/goods provided by private firms, funded by the consumer

22
Q

Positives of public sector

A
  • Provide non-profitable services

- Available to everyone

23
Q

Negatives of public sector

A
  • No incentive to provide quality

- Funded by taxpayer (not fair)

24
Q

What is meant by privatisation

A

When public sector enterprises are sold by government to private firms

25
Q

Advantages of privatisation

A
  • Government can raise capital

- Private firms increase quality

26
Q

Disadvantages of privatisation

A
  • Redundancies

- Increases in prices

27
Q

What is nationalisation

A

When private sector firms are bought and taken over by the government

28
Q

What is a mission statement

A

States overall purpose of firm

29
Q

What is the purpose of a mission statement

A
  • Motivates form to carry out main function

- Helps recruitment/detainment of staff

30
Q

What is an aim

A

What a firm is targeting to achieve in the long term

31
Q

What is an objective

A

A specified, short term target

32
Q

What are the 2 forms of objectives

A

SMART

PIGSS

33
Q

What does SMART objectives stand for

A 
Specific
Measurable
Achievable
Realistic
Time bound
34
Q

What does PIGSS objectives stand for

A 
Profit
Increases market share
Growth
Service/ethics
Survival
35
Q

Give examples of constraints on objectives

A
  • Lack of capital
  • Lack of demand
  • Unavailability of premises
36
Q

What are corporate social objectives

A

Environmental, ethical, sustainable and community focused objectives

37
Q

Advantages of corporate social objectives

A
  • Improve reputation

- In reader motivation for staff

38
Q

Disadvantages of corporate social objectives

A
  • High costs (maybe no return)

- Cynical accusations, bad publicity magnified more

39
Q

Why may objectives for a business change

A
  • Economic change
  • Legal issues
  • Political issues
  • Social attitudes (demand)
40
Q

Give an example of conflicts of objectives

A

Environmental + growth

41
Q

What is a business plan

A

Statement that outlines how managers/owners intend to achieve objectives

42
Q

What may a business plan include

A
  • Finance
  • Market research
  • Objectives
  • Potential strategies
43
Q

Why may strategies fail

A
  • Lack of market knowledge
  • La k of capital
  • Poor management
44
Q

Why is a business plan important

A
  • Set a budget
  • Obtain bank loan
  • Help achieve aims and objectives
45
Q

Define a risk

A

Investment of resources when returns are not certain

46
Q

Define reward

A

Returns achieved through taking risk/investment

47
Q

What is a quantifiable risk

A

One that can be measures

48
Q

What is a non-quantifiable risk

A

One that can’t be measured (eg if taking a risk leads to stress in business)

Business JSL (11 decks)

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