1.4 Making the business effective Flashcards
Bankrupt
Bankrupt: when an individual is unable to pay
their debts, even after all personal assets have
been sold for cash.
Limited liability
Limited liability: restricting the losses suffered
by owners/shareholders to the sum they invested
in the business.
What is a PLC
Private limited company: a small family business
in which shareholders enjoy limited liability.
What is a sole trader
Sole trader: a business run by one person; that
person has unlimited liability for any business
debts.
Unlimited liability
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
Franchising: paying a franchise owner for the
right to use an established business name,
branding and business methods.
Royalties
Royalties percentage of the sales revenue to be
paid to the overall franchise owner.
Fixed premises
Fixed premises: buildings that have to be where they are (for example, the high street); e-commerce buildings can be located anywhere.
Proximity
Proximity: nearness; whether or not a business wants to be close to a factor such as ‘materials’.
Place
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
Price: setting the price that retailers must pay,
which in turn affects the consumer price.
Product
Product: targeting customers with a product that
has the right blend of functional and aesthetic
benefits without being too expensive to produce.
Promotion
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
Business plan: a detailed document setting out
the marketing and financial thinking behind a
proposed new business.
