1.4 making the business effective Flashcards
advantages of sole traders
easy to set up
own boss
decide what happens
complete control
disadvantages of sole traders
long hours
unincorporated
unlimited liability
hard to raise money
advantages of a partnership
more ideas
share the work
more capital
disadvantages of partnership
legally responsible for each other
unlimited liability
disagreements
profits are shared
advantages of Ltd.
limited liability
easier to get loans
sell shares to family
disadvantages of Ltd.
more expensive
risk of losing control
publish accounts
advantages of Franchising
less risk
easier to get loans
provide training
disadvantages of Franchising
strict rules
expensive to start up
regular payments of royalties
whats in it for the franchise owner
expand sales
future sales
concentrate on developing new ideas
what does proximity to materials mean
closer to raw means lower transport costs
good for bulk gaining or bulk reducing
what does proximity to market mean for
b2c and b2b
need to be close
doesn’t matter
what does proximity to competition mean for
convenience goods and shopping goods
don’t want lots of competition as they sell needs of customers
want competition because customers come there and want choice
what does proximity to labour mean
if in area of unemployment can keep wages low and people want jobs
also certain areas have certain skills
how does the internet effect the location
firms can be flexible
manufacturers can locate far away from materials so don’t need premises
people can work from home
what is product
identify customer needs and then fufil them
what price do customers want
good value
how promotion works
make people aware and want to buy it
what is place in terms of the marketing mix
method of distribution
what factors effect marketing mix
changes in tech
what customers need
competition
what type of price will small businesses have
focus on start up costs so have higher prices to cover costs
what type of product do small businesses have
smaller range
higher quality
what type of promotion do small businesses have
local customers
what type of place do small businesses go
sell directly to customers
what should be included in a business plan
business idea aims and objectives target market marketing mix location finance
