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Business > 1.4 > Flashcards

1.4 Flashcards

1
Q

Business locations depend on its proximity to what 4 things

A

Proximity to…

  1. Market
  2. Labour
  3. Materials
  4. Competitors
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2
Q

Define sole trader

A

A business owned by one person

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3
Q

Define partnership

A

A business owned by 2 or more people equally

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4
Q

Define private limited company

A

A company owned by shareholders all the shareholders have to agree if a share is sold

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5
Q

Define public limited company

A

Owned by shareholders the company has separate legal entity to its shareholder

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6
Q

Define franchise

A

Buy into an existing business to acquire the right to use an existing business idea

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7
Q

What’s an advantage of a sole trader

A

Control

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8
Q

What’s an advantage of a partnership

A

Spread the workload

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9
Q

What are advantages of a private limited company (Ltd)

A

Shareholders will receive a financial reward in the form of dividends
Limited liability

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10
Q

What are advantages of a public limited company (PLC)

A

If the company is successful shareholders will receive financial reward.
Limited liability

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11
Q

What are advantages of a franchise

A

Less money on advertising

Limited liability

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12
Q

What are disadvantages of a private limited company (Ltd)

A

Pay cooperation tax

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13
Q

What are disadvantages of a sole trader

A

Less financial security
Less advice
Unlimited liability

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14
Q

What are disadvantages of a partnership

A

Unlimited liability
Give money to your partner
Unlimited liability

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15
Q

What are disadvantages of a public limited company

A

Pay corporation tax on profit

More shareholders=less control

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16
Q

What are disadvantages of a franchise

A

Have to pay royalty

Lack of choice

17
Q

Define unlimited liability

A

The owners of the business are personally liable for all the debts

18
Q

Define limited liability

A

The owner is only responsible for the money that they have invested into the business

19
Q

What are the 4Ps (marketing mix)

A

Product
Price
Place
Promotion

20
Q

Define skimming pricing

A

Setting a high initial price for a new product in order to recoup costs

21
Q

Define penetration pricing

A

Setting a low initial price for a new product in order to get a foothold in the market (sales) and gain market share

22
Q

Define philological pricing

A

Selling a product at £1.99 rather than £2.00 to a

23
Q

Define competitive pricing

A

Based on the prices charged by competitive, maybe the same or slightly lower

24
Q

What is a business plan

A

A document which sets out the future direction for a business

25
Q

what things should be included in a business plan

A

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

Business (10 decks)

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