1.4- Making the business effective Flashcards
What is limited liability?
- The risk is limited
- Only money invested in the business start up is lost
What is unlimited liability?
- The risks are unlimited
- Personal assets are at risk
- Business owner is completely liable for the business failure
What is a sole trader and what are the advantages and disadvantages?
- When one person sets it a business Advantages -The sole trader makes business decisions -Quick and easy to set up -Sole trader keeps profits Disadvantages -The sole trader has unlimited liability -Puts a lot of pressure on one person -Difficult to raise money to grow a business
What is a partnership and what are the advantages and disadvantages?
-When two or more people set up a business
Advantages
-Business owners can share ideas
-The risk is shared
-Easier to raise finance
Disadvantages
-Decisions made by one partner can effect everyone
-If a partner leaves, the business no longer exists
-Profits are shared
What is a Private limited company and what are the advantages and disadvantages?
-A business that is owned by shareholders
Advantages
-Owners have limited liability
-Easier to raise finance
-Business can still trade if shareholders change
Disadvantages
-More complex to set up
-There may be disagreements between shareholders
-The business financial information is published
What are the factors that affect business location?
Proximity to:
- Market
- Labour
- Materials
- Competitors
What is the impact of the internet on location decisions?
E-commerce
- No store
- Wider target audience
- Open 24/7
What are the elements in the Marketing mix?
- Price
- Product
- Promotion
- Place
What does a business plan help an entrepreneur to identify?
- The Business idea
- The Business aims and objectives
- Market research
- Forecast revenue
- Cash flow forecast
- Sources of finance
- Location (e-commerce/store)
- Marketing mix
