AOS3 Flashcards
what is a resource?
resources are all the people and objects that are needed for a business to function properly.
what are the three types of business resources? give an example for each
the three types of business resources are:
- natural resources: land
- labour resources: knowledge of a doctor
- capital resources: machinery
define each business resource
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
what factors should be considered when deciding on a business location
visibility, cost, proximity to customers and suppliers, proximity to competitors, complementary businesses
what is an internal source of finance
equity (crowdfunding, shares etc.)
name one long term and one short term example for external sources of finance
short term - bank overdraft
long term - mortgage
establishing a new business is most suited to…
a business owner who has recognized a gap in the marketer has developed a totally new product
purchasing an existing business is most suited to…
a business owner who is seeking instant income and a proven track record
give one cost and one benefit of establishing a new business
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
give one cost and one benefit of purchasing an existing business
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
define sole trader
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
define partnership
partnerships are similar to sole traders they have unlimited liability. a partnership can have 2-20 partners
one advantage and one disadvantage of a sole trader
advanatge- complete control
disadvantage- difficult to operate when sick
one advantage and one disadvantage of a partnership
advantage- less costly to operate than a company
disadvantage- the possibility of disputes
define company
a company is a business with the objective of making a profit and creating wealth for its owners/investors
define incorporation
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
one advantage and one disadvantage of incorporation
advantage- easier to attract public finance
disadvantage- double taxation, company and personal
what is a business model
a business model is a plan that outlines how a business will run its operations to generate profit
one advantage and disadvantage of online business
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
one advantage and one disadvantage of bricks and mortar
advantage- face to face interaction with customers allowing them to physically inspect gods prior to purchase
disadvantage- it is expensive to establish and maintain
one advantage and one disadvantage of bricks and clicks
advantage- continually assessable to the public
disadvantage- there is a lot more to manage in terms of in-store and online
what is a franchise
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
one advantage and one disadvantage of a franchise
advantage- access to existing customer base and reputation
disadvantage- lack of freedom and creativity
what is import and export?
import and export businesses are those which earn their income by trading goods internationally
what is a social enterprise?
a business models that aim to improve the wellbeing of others through business activities
one advantage and one disadvantage of social enterprise
advantage- receive assistance from the government
disadvantage- can be difficult to see a social enterprise as both a business and a community organisation
define SWOT
a SWOT analysis helps a business identify internal strengths and weaknesses as well as external opportunities and threats
what is corporate social responsibility
corporate social responsibility is when a business goes above and beyond its legal obligation to improve the wellbeing of a community
