Business Activity

Question 1

What is business activity?

Answer 1

anything to do with an organisation providing a service.

Question 2

What are the risks of starting your own business?

Answer 2

financial, strained relations, mental health issues

Question 3

What are the rewards of starting your own business?

Answer 3

financial, independence, self praise

Question 4

What are aims in a business?

Answer 4

overall goal of a business.

Question 5

What are business objectives?

Answer 5

the measurable targets of how to achieve aims

Question 6

what is profit satisficing?

Answer 6

to make enough profit to keep owners happy.

Question 7

What is a business plan?

Answer 7

these set out how the business intend to achieve objectives.

Question 8

What is included in a business plan?

Answer 8

1. the idea
2. the people running the business
3. market research
4. finance
5. objectives
6. target market
7. competition

Question 9

What are advantages to a business plan?

Answer 9

1. helps to raise finance
2. measures performance
3. staying organised/on task

Question 10

What are disadvantages of business plans?

Answer 10

1. plans need updating
2. time to make the plans
3. business plans don’t guarantee success
4. plans are only as good as owners.

Question 11

why are start up businesses risky?

Answer 11

1. not much profit
2. lack of knowledge
3. competition

Question 12

What is a sole trader?

Answer 12

a business controlled and owned by ONE person.

Question 13

What are the advantages of a sole trader?

Answer 13

1. keep all profits
2. control over business
3. easy to set up

Question 14

what is a partnership?

Answer 14

a business owned by TWO or MORE people.

Question 15

What is unlimited liability?

Answer 15

being responsible for all your debt

Question 16

What is limited liability?

Answer 16

all debts are limited to what you have already put into business

Question 17

What liability does a partnership have?

Answer 17

Unlimited Liability / limited liability partnership

Question 18

what are shares?

Answer 18

a unit of ownership in a limited ltd (private limited company)

Question 19

What is a shareholder?

Answer 19

the owner of private and public companies.

Question 20

what is a public limited company?

Answer 20

a business that is legally allowed to sell its shares to the public.

Question 21

What is a private limited company?

Answer 21

a business that is run by its shareholders.

Question 22

Who can be a shareholder in a private limited company?

Answer 22

friends and family

Question 23

What is a dividend?

Answer 23

an annual payment paid from profits to shareholders.

Question 24

what is divorce of ownership and control?

Answer 24

when directors and shareholders disagree.

Question 25

What is maximisation?

Answer 25

increase revenue and decrease cost.

Question 26

What are benefits of business object?

Answer 26

1. gives direction 2. focus and motivation for employee 3. a measurement for success.

Question 27

What are internal reasons for a business objective changing?

Answer 27

1. an objective has been completed 2. a change in views and needs of shareholders 3. may want more ambitious objectives.

Question 28

What are external reasons for a business objective changing?

Answer 28

1. new competitors arriving 2. a change in economic environment

Question 29

what is a stake holder?

Answer 29

any person interested in business.

Question 30

What are examples of stake holders?

Answer 30

1. staff 2. competitors 3. suppliers 4. customers 5. the media

Question 31

What is a merger?

Answer 31

two or more firms join to create new business.

Question 32

What is a takeover?

Answer 32

when a business buys another business.

Question 33

What is external growth?

Answer 33

focusing on the areas you don't have direct control over

Question 34

What is internal growth?

Answer 34

occurs when a business expand it's own activities by launching new products/entering new markets

Question 35

What are advantages of external growth?

Answer 35

1. cost effective 2. gain new customers 3. eliminate competition 4. more ideas.

Question 36

What are the four types of external growth?

Answer 36

1. horizontal 2. backwards 3. forwards 4. diversification

Question 37

What is horizontal integration?

Answer 37

a business joins another at same stage

Question 38

What is backwards integration?

Answer 38

a business joins at a previous stage.

Question 39

What is forward integration?

Answer 39

a business joins another at the next stage?

Question 40

what is diversification?

Answer 40

a business joins another at another stage.

Question 41

What is the primary sector?

Answer 41

taking materials from the earth (natural source)

Question 42

What is the secondary sector?

Answer 42

secondary stage of production. they use raw materials

Question 43

what is the ternary sector?

Answer 43

condensed with providing a service.

Question 44

What is Organic Growth?

Answer 44

When a business expands inside the business