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Business > 1.4 Making the business effective > Flashcards

1.4 Making the business effective Flashcards

1
Q

What is a sole trader?

A

Sole trader:

  • One owner of a business
  • Can have employees
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2
Q

What are the advantages of a sole trader?

A

Advantages of a sole trader:

  • Easy to set up
  • Own boss
  • Profit at your hands
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3
Q

What are the disadvantages of a sole trader?

A

Disadvantages of a sole trader:

  • Long hours
  • Unincorporated (no legal identity)
  • Unlimited liability (assets at risk if in debt)
  • Banks less likely to give loans
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4
Q

What is a partnership?

A

Partnership:

  • More than two people
  • Equal share of profit/ decisions
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5
Q

What are the advantages of a partnership?

A

Advantages of partnership:

  • More ideas
  • Share work
  • More capital
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6
Q

What are the disadvantages of a partnership?

A

Disadvantages of a partnership:

  • Each partner legally responsible
  • Unlimited liability
  • Shared capital
  • More disagreements
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7
Q

What is a limited company?

A

Limited company:

  • Owned by shareholders
  • Incorporated (separate legal identity)
  • Lose money invested
  • Limited liability
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8
Q

What is a private limited company?

A

Private limited company:

  • Ownership restricted
  • Shares sold if all shareholders agree
  • Ltd. after name
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9
Q

What are the advantages of a private limited company?

A

Advantages of private limited company:

  • Limited liability ( cannot lose more than invested)
  • Easier to get a loan
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10
Q

What are the disadvantages of a private limited company?

A

Disadvantages of private limited company:

  • More expensive (paper work)
  • Obliged to publish accounts every year (doesn’t have to be public)
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11
Q

What is franchising?

A

Franchising:

  • Uses brand name of another firm
  • Fee given to brand they are franchising from
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12
Q

What is a franchisor?

A

Franchisor:

  • Product manufacturer
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13
Q

What is a franchisee?

A

Franchisee:

  • Firms selling products using name
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14
Q

What are the advantages of franchising?

A

Advantages of franchising:

  • Customers recognise brand
  • Easier to get bank loan
  • Franchisor might help franchisee
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15
Q

What are the disadvantages of franchising?

A

Disadvantages of franchising:

  • Franchisor might have strict rules
  • Pay a lot at start and then monthly pay after
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16
Q

What are 5 location factors affecting businesses?

A

Business factors affecting businesses:

  • Location of raw materials (lower transport costs
  • Labour supply
  • Competition (more customers)
  • Market
  • E-commerce

Business (5 decks)

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