Business activity Flashcards
What are the characteristics of an entrepreneur
Creativity
risk-taking
determination
confidence
Rewards for risk-taking
Financial
independence
self-satisfaction
changing customer habits
Drawbacks for risk taking
Financial
health
strained relationships
Purpose of business planning
Reduce risk
help a business succeed
Contents of a business plan
Business idea
people running the business
market research
finance
objectives of the business
target market
competitors
Role of a business plan
Identify market
help obtain finance
identify resources that a business needs to operate
achieve aims and objectives
What is a sole trader
Owned by one person
Advantages of a sole trader
Easy to set up
requires little finance
private financial information
owner has complete control 
Disadvantages of a sole trader
Unlimited liability
skills shortage
long hours
continuity
What is a partnership
A business owned by two or more people
Advantages of a partnership
Easier to raise capital as there are multiple owners 
Shared workload
more skills
private financial information
Disadvantages of a partnership
Shared profit
unlimited liability 
Deed of partnership
Document stating how the business operates which includes the roles of each partner and how much capital each partner has contributed
Sleeping partner 
They provide capital for the business but take no part in running the business
Limited liability partnerships
The liability for the debts of a partnership is limited to the amount of money they put into the business
Private limited companies
Shareholders are chosen by owners and can’t be sold to the general public
Advantages of private limited companies
Limited liability
continuity
Disadvantages of private limited companies
Dividends
sale of shares is restricted
Public limited companies
Shares can be brought by public on the stock exchange
Advantages of public limited companies
Easy to raise large amounts of capital
Limited liability
Disadvantages of public limited companies
Possibility of takeover
public financial information
Potential aims and objectives for a business
Profit
growth
market share
survival
Aims and objectives during the start-up
Survival
establish name
Aims and objectives as a business involves
Profit
growth
market share
becoming an LTD or plc 
