AOS3

Question 1

what is a resource?

Answer 1

resources are all the people and objects that are needed for a business to function properly.

Question 2

what are the three types of business resources? give an example for each

Answer 2

the three types of business resources are:

• natural resources: land
• labour resources: knowledge of a doctor
• capital resources: machinery

Question 3

define each business resource

Answer 3

natural resources - items used by a business that comes from the natural environment
labour resources - people providing skills, knowledge and effort, can also be subcontractors
capital resources- the tools and machinery that are used to produce goods or perform a service

Question 4

what factors should be considered when deciding on a business location

Answer 4

visibility, cost, proximity to customers and suppliers, proximity to competitors, complementary businesses

Question 5

what is an internal source of finance

Answer 5

equity (crowdfunding, shares etc.)

Question 6

name one long term and one short term example for external sources of finance

Answer 6

short term - bank overdraft

long term - mortgage

Question 7

establishing a new business is most suited to…

Answer 7

a business owner who has recognized a gap in the marketer has developed a totally new product

Question 8

purchasing an existing business is most suited to…

Answer 8

a business owner who is seeking instant income and a proven track record

Question 9

give one cost and one benefit of establishing a new business

Answer 9

cost- without a previous business reputation it may be more difficult to secure finance
benefit- the owner has freedom to set up the business exactly as they wish

Question 10

give one cost and one benefit of purchasing an existing business

Answer 10

cost- the existing image and policies of the business may be difficult to change, especially if the business has a poor reputation
benefit- sales to existing customers generate instant income

Question 11

define sole trader

Answer 11

a sole trader is someone who owns and operate a business on their own. they have unlimited liability for all debts meaning they are personally responsible

Question 12

define partnership

Answer 12

partnerships are similar to sole traders they have unlimited liability. a partnership can have 2-20 partners

Question 13

one advantage and one disadvantage of a sole trader

Answer 13

advanatge- complete control

disadvantage- difficult to operate when sick

Question 14

one advantage and one disadvantage of a partnership

Answer 14

advantage- less costly to operate than a company

disadvantage- the possibility of disputes

Question 15

define company

Answer 15

a company is a business with the objective of making a profit and creating wealth for its owners/investors

Question 16

define incorporation

Answer 16

incorporation is the process a business goes through to become a registered company with a separate legal entity, so the shareholders cannot be personally responsible for the debts of the business

Question 17

one advantage and one disadvantage of incorporation

Answer 17

advantage- easier to attract public finance

disadvantage- double taxation, company and personal

Question 18

what is a business model

Answer 18

a business model is a plan that outlines how a business will run its operations to generate profit

Question 19

one advantage and disadvantage of online business

Answer 19

advantage- the internet is easily accessible
disadvantage- customers may be hesitant to buy online due to fear of theft and not being able to physically inspect goods prior to purchase

Question 20

one advantage and one disadvantage of bricks and mortar

Answer 20

advantage- face to face interaction with customers allowing them to physically inspect gods prior to purchase
disadvantage- it is expensive to establish and maintain

Question 21

one advantage and one disadvantage of bricks and clicks

Answer 21

advantage- continually assessable to the public

disadvantage- there is a lot more to manage in terms of in-store and online

Question 22

what is a franchise

Answer 22

a franchise agreement is when a person buys the rights to use a business name and distribute the products and services of an existing business

Question 23

one advantage and one disadvantage of a franchise

Answer 23

advantage- access to existing customer base and reputation

disadvantage- lack of freedom and creativity

Question 24

what is import and export?

Answer 24

import and export businesses are those which earn their income by trading goods internationally

Question 25

what is a social enterprise?

Answer 25

a business models that aim to improve the wellbeing of others through business activities

Question 26

one advantage and one disadvantage of social enterprise

Answer 26

advantage- receive assistance from the government

disadvantage- can be difficult to see a social enterprise as both a business and a community organisation

Question 27

define SWOT

Answer 27

a SWOT analysis helps a business identify internal strengths and weaknesses as well as external opportunities and threats

Question 28

what is corporate social responsibility

Answer 28

corporate social responsibility is when a business goes above and beyond its legal obligation to improve the wellbeing of a community