1.4 Business Flashcards
Bankrupt:
when an individual is unable to pay
their debts, even after all personal assets have
been sold for cash.
Limited liability:
restricting the losses suffered
by owners/shareholders to the sum they invested
in the business.
Private limited company:
a small family business
in which shareholders enjoy limited liability.
Sole trader:
a business run by one person; that
person has unlimited liability for any business
debts.
Unlimited liability:
treating the business and
the individual owner as inseparable, therefore
making the individual responsible for all the
debts of a failed business.
Franchising
paying a franchise owner for the
right to use an established business name,
branding and business methods.
Royalties
percentage of the sales revenue to be
paid to the overall franchise owner.
Entrepreneur
a person who sets up a
business and takes on financial risks in the
hope of profit.
Fixed premises:
buildings that have to
be where they are (for example, the high
street); e-commerce buildings can be located
anywhere.
Proximity:
nearness; whether or not a
business wants to be close to a factor such as
‘materials’.
Place:
how and where the supplier is going to get
the product or service to the consumer; it includes
selling products to retailers and getting the
products displayed in prominent positions.
Price:
setting the price that retailers must pay,
which in turn affects the consumer price.
Product:
targeting customers with a product that
has the right blend of functional and aesthetic
benefits without being too expensive to produce.
Promotion:
within the 4Ps promotion means
all the methods that a business uses to
persuade customers to buy, for example branding,
packaging, advertising to boost the long-term
image of the product and short-term offers.
Business plan:
a detailed document setting out
the marketing and financial thinking behind a
proposed new business.
