1.4 making the business effective

Question 1

advantages of sole traders

Answer 1

easy to set up
own boss
decide what happens
complete control

Question 2

disadvantages of sole traders

Answer 2

long hours
unincorporated
unlimited liability
hard to raise money

Question 3

advantages of a partnership

Answer 3

more ideas
share the work
more capital

Question 4

disadvantages of partnership

Answer 4

legally responsible for each other
unlimited liability
disagreements
profits are shared

Question 5

advantages of Ltd.

Answer 5

limited liability
easier to get loans
sell shares to family

Question 6

disadvantages of Ltd.

Answer 6

more expensive
risk of losing control
publish accounts

Question 7

advantages of Franchising

Answer 7

less risk
easier to get loans
provide training

Question 8

disadvantages of Franchising

Answer 8

strict rules
expensive to start up
regular payments of royalties

Question 9

whats in it for the franchise owner

Answer 9

expand sales
future sales
concentrate on developing new ideas

Question 10

what does proximity to materials mean

Answer 10

closer to raw means lower transport costs

good for bulk gaining or bulk reducing

Question 11

what does proximity to market mean for

b2c and b2b

Answer 11

need to be close

doesn’t matter

Question 12

what does proximity to competition mean for

convenience goods and shopping goods

Answer 12

don’t want lots of competition as they sell needs of customers
want competition because customers come there and want choice

Question 13

what does proximity to labour mean

Answer 13

if in area of unemployment can keep wages low and people want jobs
also certain areas have certain skills

Question 14

how does the internet effect the location

Answer 14

firms can be flexible
manufacturers can locate far away from materials so don’t need premises
people can work from home

Question 15

what is product

Answer 15

identify customer needs and then fufil them

Question 16

what price do customers want

Answer 16

good value

Question 17

how promotion works

Answer 17

make people aware and want to buy it

Question 18

what is place in terms of the marketing mix

Answer 18

method of distribution

Question 19

what factors effect marketing mix

Answer 19

changes in tech
what customers need
competition

Question 20

what type of price will small businesses have

Answer 20

focus on start up costs so have higher prices to cover costs

Question 21

what type of product do small businesses have

Answer 21

smaller range

higher quality

Question 22

what type of promotion do small businesses have

Answer 22

local customers

Question 23

what type of place do small businesses go

Answer 23

sell directly to customers

Question 24

what should be included in a business plan

Answer 24

business idea
aims and objectives
target market
marketing mix
location
finance

Question 25

what are objectives and aims

Answer 25

aims are general

objectives are specific

Question 26

what is the target market

Answer 26

who the business is aiming to sell to backed up by research

Question 27

what type of finance should be in a business plan

Answer 27

how much money is needed
cash flow
costs, revenue, profits

Question 28

how does the business plan help

Answer 28

reduce risks
stop wasted money
decide aims and objectives
help make business decisions
convince financial backers