Business Activity Flashcards
What is business activity?
anything to do with an organisation providing a service.
What are the risks of starting your own business?
financial, strained relations, mental health issues
What are the rewards of starting your own business?
financial, independence, self praise
What are aims in a business?
overall goal of a business.
What are business objectives?
the measurable targets of how to achieve aims
what is profit satisficing?
to make enough profit to keep owners happy.
What is a business plan?
these set out how the business intend to achieve objectives.
What is included in a business plan?
- the idea
- the people running the business
- market research
- finance
- objectives
- target market
- competition
What are advantages to a business plan?
- helps to raise finance
- measures performance
- staying organised/on task
What are disadvantages of business plans?
- plans need updating
- time to make the plans
- business plans don’t guarantee success
- plans are only as good as owners.
why are start up businesses risky?
- not much profit
- lack of knowledge
- competition
What is a sole trader?
a business controlled and owned by ONE person.
What are the advantages of a sole trader?
- keep all profits
- control over business
- easy to set up
what is a partnership?
a business owned by TWO or MORE people.
What is unlimited liability?
being responsible for all your debt
What is limited liability?
all debts are limited to what you have already put into business
What liability does a partnership have?
Unlimited Liability / limited liability partnership
what are shares?
a unit of ownership in a limited ltd (private limited company)
What is a shareholder?
the owner of private and public companies.
what is a public limited company?
a business that is legally allowed to sell its shares to the public.
What is a private limited company?
a business that is run by its shareholders.
Who can be a shareholder in a private limited company?
friends and family
What is a dividend?
an annual payment paid from profits to shareholders.
what is divorce of ownership and control?
when directors and shareholders disagree.
What is maximisation?
increase revenue and decrease cost.
What are benefits of business object?
- gives direction
- focus and motivation for employee
- a measurement for success.
What are internal reasons for a business objective changing?
- an objective has been completed
- a change in views and needs of shareholders
- may want more ambitious objectives.
What are external reasons for a business objective changing?
- new competitors arriving
- a change in economic environment
what is a stake holder?
any person interested in business.
What are examples of stake holders?
- staff
- competitors
- suppliers
- customers
- the media
What is a merger?
two or more firms join to create new business.
What is a takeover?
when a business buys another business.
What is external growth?
focusing on the areas you don’t have direct control over
What is internal growth?
occurs when a business expand it’s own activities by launching new products/entering new markets
What are advantages of external growth?
- cost effective
- gain new customers
- eliminate competition
- more ideas.
What are the four types of external growth?
- horizontal
- backwards
- forwards
- diversification
What is horizontal integration?
a business joins another at same stage
What is backwards integration?
a business joins at a previous stage.
What is forward integration?
a business joins another at the next stage?
what is diversification?
a business joins another at another stage.
What is the primary sector?
taking materials from the earth (natural source)
What is the secondary sector?
secondary stage of production. they use raw materials
what is the ternary sector?
condensed with providing a service.
What is Organic Growth?
When a business expands inside the business
