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Business Flashcards GCSE > 1.1 Business In The Real World > Flashcards

1.1 Business In The Real World Flashcards

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1
Q

Define entrepreneur.

A

A person who starts up their own business, and usually has these qualities: risk-taker, innovative, and organised.

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2
Q

What do businesses serve?

A

Customer need or wants.

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3
Q

Define distributor.

A

A company which buys products from manufactures and sells them on to businesses or consumers.

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4
Q

Name three reasons why businesses are set up:

A
  • To sell goods or services for a profit.
  • To benefit society.
  • To distribute goods.
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5
Q

What are the three sectors in the economy? Define each.

A
  • Primary - Obtaining raw materials.
  • Secondary - Manufacturing.
  • Tertiary - Selling the goods or service to customers.
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6
Q

What are the two definitions of enterprise:

A
  • Qualities of an entrepreneur.

- Business.

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7
Q

What are the two most significant qualities of an entrepreneur?

A
  • Risk Taking

- Identifies business opportunities.

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8
Q

What are the four external factors that affect the operation of a business?

A
  • The economy
  • Legislation
  • The physical environment
  • Advancements in technology
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9
Q

What are the four factors of production?

A
  • Land
  • Labour
  • Capital
  • Enterprise
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10
Q

Define opportunity cost.

A

Whenever a business spends time or money doing something, they could have spent this time or money doing something else.

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11
Q

What are the four key functions of a business?

A
  • HR (Human Resources)
  • Finance
  • Production
  • Marketing
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12
Q

Why do people set up their own business?

A
  • To be their own boss
  • To do/work for something they are interested in
  • To benefit others
  • Flexibility (in terms of when you can work)
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13
Q

What is a sole trader?

A

A single person who is the only owner of the business. They are the only person who can control the profits.

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14
Q

Identify 4 Advantages of Sole Traders.

A
  • The easiest to set up.
  • You get to be your own boss!
  • You control all the profits!
  • It is easy to change the ‘legal structure’ of the business. E.G, into a Ltd.
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15
Q

Identify 4 Disadvantages of being a sole trader.

A
  • Unlimited liability means that you are responsible for all of the debt, and your personal assets are at risk.
  • It can be hard to ask banks for money.
  • You are responsible for all the decisions, which can be stressful.
  • Employees might not like it if you get to keep all the profits.
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16
Q

What is a partnership?

A

A business that is owned by 2 or more owners. Each partner has an equal share of profits, and equal say when making decisions.

17
Q

Identify 2 Advantages of Partnerships.

A
  • More ideas, and experience.

- Better at raising finance than sole traders.

18
Q

Identify 4 Disadvantages of a Partnership

A
  • You have to share the profits. May end up with lower profit to yourself than if you were a sole trader.
  • Unlimited Liability.
  • Disagreements are possible.
  • All partners are liable for each other’s actions.
19
Q

What is a Private Limited Company?

A

It is a company where ownership of shares within the business is restricted.

20
Q

Identify 3 Advantages of a Private Limited Company.

A
  • Limited Liability.
  • The shareholders have a lot of control over how the business is managed.
  • It is easier for a limited company to get a loan.
21
Q

Identify 2 Disadvantages of a Private Limited Company.

A
  • There is an upfront cost.

- The company is legally obliged to publish their accounts each year.

22
Q

What is a Public Limited Company?

A

A Limited Company which can sell shares on the stock exchange.

23
Q

Identify 3 Advantages of a Public Limited Company.

A
  • Easier to raise finance through selling shares!
  • Easier to raise finance from banks.
  • Limited Liability!
24
Q

Identify 3 Disadvantages of a Public Limited Company.

A
  • Owners have little say over how the business is run.
  • Anyone can take over the company, if they are the majority shareholder.
  • The company’s accounts must be made public.
25
Q

Why do business try to become incorporated?

A

To make it easier to get a bank loan.

26
Q

What is a not-for-profit?

A

A company where all the profit is reinvested back into the business. It can’t be kept by the owners.

27
Q

What are the three not-for-profits?

A
  • Unincorporated Association.
  • Charities
  • Social Enterprise

Business Flashcards GCSE (2 decks)

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