1.4 Flashcards
Business locations depend on its proximity to what 4 things
Proximity to…
- Market
- Labour
- Materials
- Competitors
Define sole trader
A business owned by one person
Define partnership
A business owned by 2 or more people equally
Define private limited company
A company owned by shareholders all the shareholders have to agree if a share is sold
Define public limited company
Owned by shareholders the company has separate legal entity to its shareholder
Define franchise
Buy into an existing business to acquire the right to use an existing business idea
What’s an advantage of a sole trader
Control
What’s an advantage of a partnership
Spread the workload
What are advantages of a private limited company (Ltd)
Shareholders will receive a financial reward in the form of dividends
Limited liability
What are advantages of a public limited company (PLC)
If the company is successful shareholders will receive financial reward.
Limited liability
What are advantages of a franchise
Less money on advertising
Limited liability
What are disadvantages of a private limited company (Ltd)
Pay cooperation tax
What are disadvantages of a sole trader
Less financial security
Less advice
Unlimited liability
What are disadvantages of a partnership
Unlimited liability
Give money to your partner
Unlimited liability
What are disadvantages of a public limited company
Pay corporation tax on profit
More shareholders=less control
What are disadvantages of a franchise
Have to pay royalty
Lack of choice
Define unlimited liability
The owners of the business are personally liable for all the debts
Define limited liability
The owner is only responsible for the money that they have invested into the business
What are the 4Ps (marketing mix)
Product
Price
Place
Promotion
Define skimming pricing
Setting a high initial price for a new product in order to recoup costs
Define penetration pricing
Setting a low initial price for a new product in order to get a foothold in the market (sales) and gain market share
Define philological pricing
Selling a product at £1.99 rather than £2.00 to a
Define competitive pricing
Based on the prices charged by competitive, maybe the same or slightly lower
What is a business plan
A document which sets out the future direction for a business
what things should be included in a business plan
Business idea
Aims and objectives
Revenue,costs and profit
Cash flow forecast
Source of finance
Explain key features of the business like the location/employees
Discuss the elements of the marketing mix
