1.4 The options for Business Startups Flashcards
Bankrupt
when an individual is unable to pay
their debts, even after all personal assets have
been sold for cash.
Sole Trader
a business run by one person; that
person has unlimited liability for any business
debts.
Limited Liability
restricting the losses suffered
by owners/shareholders to the sum they invested
in the business.
Unlimited Liability
treating the business and
the individual owner as inseparable, therefore
making the individual responsible for all the
debts of a failed business.
Private Limited Company
a small family business
in which shareholders enjoy limited liability.
Franchising
paying a franchise owner for the
right to use an established business name,
branding and business methods.
Royalties
percentage of the sales revenue to be
paid to the overall franchise owner.
Entrepreneur
a person who sets up a
business and takes on fi nancial risks in the
hope of profit.
Fixed Premises
buildings that have to
be where they are (for example, the high
street); e-commerce buildings can be located
anywhere.
Proximity
nearness; whether or not a
business wants to be close to a factor such as
‘materials’.
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
setting the price that retailers must pay,
which in turn affects the consumer price.
Product
targeting customers with a product that
has the right blend of functional and aesthetic
benefi ts without being too expensive to produce.
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
a detailed document setting out
the marketing and fi nancial thinking behind a
proposed new business.
