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Business Studies > B1 - Business In The Real World > Flashcards

B1 - Business In The Real World Flashcards

1
Q

What is the first objective of a new business

A

To survive beyond their launch

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2
Q

What is the next objective of a new business after survival

A

To make profit

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3
Q

What is the definition of Factors of Production?

A

The Inputs used in the production process to create Output

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4
Q

What are the 4 Business Areas

A
  • Finance
  • Human Resources
  • Marketing
  • Operations
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5
Q

What are the 4 factors of production

A
  • Land ( where business is based and land of natural resources )
  • Labour ( people working in the business including managers )
  • Capital ( buildings and machinery needed in the business )
  • Enterprise ( entrepreneurs who set up the business )
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6
Q

What is a sole trader?

A

A business that’s owned by one individual that retain all profits genernated by the business

  • unlimited liability ( responsibly )
  • cheap and quick to do
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7
Q

What is a partnership?

A

Formed where a business is started and owned by more than one person

The Partners own the business and have unlimited liability ( responsibility )

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8
Q

What is a private limited company (ltd)

A

Formed when a business sets up to have a separate legal identity from its owners

( Iceland, Virgin and John Lewis ) .

They have limited liability ( responsibility )

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9
Q

What are the owners of a private limited company known as?

A

Shareholders - they receive a share of the profits ( dividends ) as a reward for being a shareholder.

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10
Q

Who run a private limited company

A

A board of directors appointed by the shareholders.

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11
Q

What factors influence the type of structure chosen by a business

A
  • Size of business
  • Type of business
  • Lender Requirements
  • Investment Protection
  • Control
  • Growth
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12
Q

What is a stakeholder

A

A stakeholder is someone who has an interest in the activities and decision making of a business.

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13
Q

What are examples of stakeholders

A
  • Shareholders or business owners
  • Managers and employees
  • Suppliers
  • Banks
  • Customers
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14
Q

What factors influence Business Location

A

( RECIPE )

  • Raw materials (primary or secondary sector )
  • Employment ( high skilled or cheap labour )
  • Competitors ( near or far from them )
  • Infrastructure ( transport - road rail sea - technology - wifi speeds )
  • Proximity To Market ( Offline & Online )
  • Finance ( new or established business )
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15
Q

What do the influences of Business location affect?

A
  • Sales
  • Image
  • Costs
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16
Q

Why business plan?

A
  • Raising Finance to present to financers
  • Setting Objectives that are measurable targets
  • Business Organisation , the need to plan how functions will be organised
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17
Q

What are advantages of Business plans

A
  • allow for setting targets

- can be used to measure performance

18
Q

What are disadvantages of Business Plans

A
  • change means plans must be flexible

- can be costly and time consuming

19
Q

What are the main parts of a Business Plan

A
  • Executive Summary
  • Mission Statement
  • Products or Services
  • Market Analysis
  • Organisation and management team
  • Production Details
  • Finance
20
Q

What are the 2 methods of Business Expansion

A
  • Internal Growth ( Organic )

- External Growth ( Integration )

21
Q

For expanding a business what are examples of Internal Growth?

A
  • Franchising
  • Opening New Stores
  • E - Commerce
  • Out sourcing
22
Q

For expanding a business what are examples of External Growth?

A
  • Mergers

- Acquisition/takeover

23
Q

What are the advantages of Organic Growth

A
  • Less risky than taking over other businesses
  • Builds on strengths of the business , e,g. brands, customers
  • Outsourcing means growth can be achieved without costly new investment
24
Q

What are the disadvantages of Organic Growth

A
  • Growth achieved may be dependant on growth of market
  • Harder to build market share if the business is already a leader
  • Slow growth , shareholders may prefer more rapid growth
26
Q

What is the tertiary sector?

A

Provision of services

27
Q

What is the primary sector?

A

Extracting raw materials

28
Q

What is the secondary sector?

A

Converting raw materials into goods

29
Q

What is an Entrepreneur ?

A

An individual who takes on RISK to hopefully gain a REWARD

30
Q

What is opportunity cost?

A

The sacrifice when an alternative is chosen

31
Q

What is unlimited liability?

A

Owner and business is the same legal entity

Owner is responible for all debts the business incurrs

32
Q

What is limited liability?

A

Owner and business are different legal

Shareholders personal assests ARE NOT at risk if businesses had debts

33
Q

What is an example of a businees that have Unlimited liability?

A
  • Sole trader

- Partnerships

34
Q

What is an example of a businees that have Limited liability?

A
  • Private limited companies

- Public limited comapanies

35
Q

What is Floatation?

A

Process of a private limited company offering shares for sale on the stock market to therefore become a public linited company

36
Q

What is Not-for-profit organisation?

A

Business set up to pursue objectives that benefit society

  • Profits are generated but not the main aim
37
Q

How do you calculate Total Costs?

A

Total costs = Fixed costs. + Variable Costs

38
Q

How do you calculate Average unit cost?

A

Total costs / Output

39
Q

What external factors affcet businesses?

A
  • Technology
  • Economy
  • Legislation
  • Environment
40
Q

What is Economies Of Scale?

A

Average cost FALLS as output GROWS

41
Q

What is Diseconomies Of Scale ?

A

Once Economies of Scale have been reached if the output grows, the average cost per unit INCREASING

Business Studies (5 decks)

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