1.5 - business forms Flashcards
What is an entrepreneur?
Someone who starts and runs a business
Name 3 characteristics of successful entrepreneurs.
Risk-taking
Difference between entrepreneur and leader?
Entrepreneurs start businesses; leaders guide and motivate others.
What are business objectives?
Specific goals a business aims to achieve (e.g. growth
What is profit maximisation?
Making the most profit possible by increasing revenue and cutting costs.
What is sales maximisation?
Prioritising selling as many products as possible over making profits.
What is survival as an objective?
The aim to keep the business running during tough periods.
What is a social enterprise?
A business with a social or environmental goal
Define opportunity cost.
The next best alternative foregone when a decision is made.
What is a trade-off?
A compromise between two conflicting objectives or choices.
What is a sole trader?
A business owned and run by one individual.
One advantage and disadvantage of a sole trader?
Advantage: full control. Disadvantage: unlimited liability.
What is a partnership?
A business owned by two or more individuals sharing profits and decisions.
What is limited liability?
Owners are only responsible for debts up to their investment.
What is a private limited company (Ltd)?
A company with shareholders where shares are not sold to the public.
What is a public limited company (Plc)?
A company that sells shares on the stock market to raise capital.
What is a franchise?
A business model where a person runs a branch of an established brand.
One benefit of franchising for the franchisee?
Recognised brand and support from franchisor.
One drawback of franchising for the franchisee?
Less control and must follow franchisor’s rules.
What is incorporation?
The process of forming a legal company (Ltd or Plc).
Why are objectives important?
They guide decision-making and allow performance measurement.
