Advanatges And Disadvantages Paper 1 Flashcards
Risks of Entrepreneur
Financial Loss
Lack of Security (job wise)
Business fail - risk time,money and effort
Rewards of Entrepreneur
Idea come to success
Earn more money improving life
Freedom and Independence
Advantages of Primary Research
Get customer views
Up to date, Relevant and Specific
Disadvantages of Primary Research
Expensive
Time-Consuming
Advantages of Secondary Research
Analyse past trends to predict future
Cheaper
Data easily found and instantly available
Disadvantages of Secondary Research
Not always relevant to needs
Often out of date
Not about your products
Advantages of Trade Credit
Gives firms time to pay debt. Good especially for small firms
Disadvantages of Trade Credit
Late payment will result in a large fee
Advantages of Overdraft
Firms can make payments in time even if they don’t have enough cash
Disadvantages of Overdraft
Higher interest rate than other loans
Bank can cancel at any time
If not paid off, bank can take businesses assets
Advantages of Loans
Quick and easy to take out
Lower interest than overdrafts
Disadvantages of Loans
Pay loan back monthly, increasing fixed costs
Advantages of Personal Savings
Easy
Disadvantages of Personal Savings
Risky as could lose all money if business fails
Advantages of Sole Traders
Easy to set up
Be your own boss
All profit is yours
Disadvantages of Sole Trader
Long hours
Unincorporated so sued personally
Unlimited Liability so you must pay back all debts yourself
Hard to raise money
Advantages of Partnerships
More ideas
Share workload
More capital put into business
Disadvantages of Partnerships
Each partner legally responsible
Unlimited Liability
Disagreements potentially
Profits are shared
Advantages of Private Limited Companies
Limited Liability
Easier to get a loan or mortgage
Disadvantages of Private limited companies
More expensive to set up due to legal paperwork
Legally obliged to publish accounts every year
Advantages of Franchising
Recognised brand so more likely to buy from franchise
Less Risky
Easier bank loan
Provided training
Disadvantages of Franchising
Limited Freedom and Strict rules
Expensive to start franchise-could be cheaper to start from scratch
