1.2 Business Ownership

Question 1

Keyword-

What is a sole trader?

Answer 1

Someone who sets up in business on his or her own

Question 2

What are advantages of a sole trader?

Answer 2

• You are your own boss
• can decide things quickly
• easy to set up
• keep all the profits
• make your own decisions

Question 3

What are disadvantages of a sole trader?

Answer 3

• unlimited liability
• may lack finance
• heavy workload
• may not have all the skills required
• difficult to take a holiday
• stressful having to make all the decisions
• need all the skills
• High interest rates when talking out a loan

Question 4

Keyword

What is a partnership?

Answer 4

Occurs when two or more people join together in a business enterprise to pursue profit

Question 5

What are the advantages of partnerships?

Answer 5

• limited liability
• better status In the eyes of some customers
• continues after the death of the founders
• can bring in investors

Question 6

What are some disadvantage of a partnership?

Answer 6

• have to register
• have to disclose information on sales and profit
• have to have accounts individually checked
• if there are other investors the original founder is not in full control of the business

Question 7

What is limited liability?

Answer 7

Not personally responsible for any debt

Question 8

What is a plc?

And what are the advantages and disadvantages?

Answer 8

public limited company

Advantages-
Anyone can buy shares easily on the stock exchange
Easy access to different lines of cash
Disadvantages-
Accounts are published
Everything must be announced
Media are more likely to cover their story if something goes wrong

Question 9

What is a ltd?

Answer 9

Limited company

Advantages-
Limited liability
More status than a sole trader
Managers can be employed

Disadvantages-
Must pay corporates tax
Accounts are published
More complicated finances

Question 10

List all 5 types of businesses

Answer 10

Sole trader
Partnership
Private Limited company
Public limited company
Not-for-profit

Question 11

What is an aim?

Answer 11

An aim is the long term goal

Eg. Grow the business into Europe

Question 12

What is an objective?

Answer 12

How to achieve the aims, the steps you need to get there.

Eg. We want to achieve sales of 10£ million in European markets in 2017

Question 13

Examples of financial aims

Answer 13

Financial security
Wealth
Profit and income
Survival

Question 14

Examples of non-financial aims

Answer 14

Challenge
Helping others
Independence
Personal satisfaction

Question 15

What does SMART stand for?

Answer 15

specific.

Measurable.

Agreed

Realistic

Time specific