1.4.4 Business Plans Flashcards

1
Q

What’s the purpose of a business plan?

A

Provides direction
Supports decision making
Helps establish the viability of the business
To arrange a bank loan
To seek investment
To help the business be successful (More than 50% of new businesses fail in first few years)

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2
Q

Bankrupt

A

When an individual is unable to pay their debts, even after all personal assets have been sold for cash.

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3
Q

Limited liability

A

Restricting the losses suffered by owners/shareholders to the sum they invested in the business.

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4
Q

Private limited company:

A

A small family business in which shareholders enjoy limited liability.

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5
Q

Sole trader:

A

A business run by one person; that person has unlimited liability for any business debts.

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6
Q

Unlimited liability:

A

Treating the business and the individual owner as inseparable, therefore making the individual responsible for all the debts of a failed business.

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7
Q

Royalties

A

Percentage of the sales revenue to be paid to the overall franchise owner.

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8
Q

Franchising

A

Paying a franchise owner for the right to use an established business name, branding and business methods.

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9
Q

Fixed premises:

A

Buildings that have to be where they are (for example, the high street); e-commerce buildings can be located anywhere.

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10
Q

Entrepreneur

A

A person who sets up a business and takes on financial risks in the hope of profit.

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11
Q

Proximity:

A

Nearness; whether or not a business wants to be close to a factor such as ‘materials’.

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12
Q

Business plan:

A

A detailed document setting out the marketing and fi nancial thinking behind a proposed new business.

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13
Q

Place:

A

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.

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14
Q

Price:

A

Setting the price that retailers must pay, which in turn affects the consumer price.

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15
Q

Product:

A

Targeting customers with a product that has the right blend of functional and aesthetic benefi ts without being too expensive to produce.

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16
Q

Promotion:

A

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.