Business Activity

Question 1

Difference between a business and an organisation?

Answer 1

on organisation is a group that’s been formed for a purpose and a business is an organisation that produces goods and services

Question 2

what are goods?

Answer 2

physical products (tangible)

Question 3

what are services?

Answer 3

non-physical products

Question 4

what are consumer goods?

Answer 4

products sold to ordinary people

Question 5

what are producer goods?

Answer 5

products produced and sold by one business to another

Question 6

needs and wants

Answer 6

needs are the requirements for human survival.
wants are people’s desires for goods & services

Question 7

Private sector

Answer 7

business owned by individuals or groups of individuals

Question 8

Public sector

Answer 8

business owned by central or local governament

Question 9

social enterprise

Answer 9

privately owned but non-profit to provide services and opportunities for others

Question 9

private enterprise

Answer 9

a business owned privately with the main objective of making profit

Question 10

public enterprise

Answer 10

government owned businesses which provide goods and or services

Question 11

types of stakeholders

Answer 11

owners
employees
managers
investors
financiers
customers
government
local community
suppliers

Question 11

What is a stakeholder

Answer 11

someone with interest in the operation of a business

Question 12

factors affecting the business environment

Answer 12

competition
economic climate
government policies and legislation
trends
demand patterns
world affairs
social factors

Question 13

business objectives

Answer 13

goals or targets set by the business

Question 14

importance of clear objectives

Answer 14

employees need smth to work towards
for motivation so the business doesn’t drift
help in decision making
easier to asses the business’ performance

Question 15

Financial objectives

Answer 15

survival
profit
increase market share
financial security / stability
sales

Question 16

Non-financial objectives

Answer 16

social objectives
personal satisfaction
challenge
independence and control

Question 17

why might business objectives change

Answer 17

market conditions
technology
performance
legislation
internal reasons

Question 18

large business

Answer 18

a business employing >250 people

Question 19

small business

Answer 19

a business employing <250 people

Question 20

revenue

Answer 20

money from sales

Question 21

who is an entrepreneurs

Answer 21

someone who takes a risk and sets up a business

Question 21

roles of an entrepreneur

Answer 21

innovation
organisation
decision-making
risk-taking

Question 22

incorporated business

Answer 22

business that’s a separate legal identity from the owner

Question 23

unincorporated business

Answer 23

where there’s no difference between the owner and the business

Question 24

sole trader

Answer 24

business owned by a single person

Question 25

features of a sole trader

Answer 25

simplest form of a business organisation
owned by one person but can employ any number of people
most are found in the tertiary sector
unlimited liability
no legal requirements

Question 26

adv of sole proprietorship

Answer 26

owner keeps all profit
independence
easy to set up & no legal requirements
flexibility
can offer personal services

Question 27

disadv of sole proprietorship

Answer 27

unlimited liability
may struggle to raise finance
too much responsibility
long hours
can’t exploit economies of scale
no continuity

Question 28

what’s a partnership?

Answer 28

business owned between 2-20 people

Question 29

features of a partnership

Answer 29

2-20 people
no legal formalities
shared responsibility & profits

Question 30

deed of partnership

Answer 30

binding legal document stating the formal rights of partners

Question 31

adv of partnerships

Answer 31

easy to set up
more capital raised
shared responsibility
partners can specialize in their area of expertise
financial info not published

Question 32

disadv of partnerships

Answer 32

unlimited liability
profit has to be shared
they may disagree and fall out
any decision is legally binding on all
tend to be small

Question 33

limited partnership

Answer 33

partnership where some contribute capital and enjoy shares without participating in the running of the business

Question 34

what’s a franchise

Answer 34

structure in which a business allows another operator to trade under their name

Question 35

the franchisor offers…

Answer 35

a licence
a start-up package
training
materials
an exclusive area to operate in

Question 36

adv to franchisor

Answer 36

fast method of growth
cheaper method of growth
some risk taken by frnchisee
franchisees are more motivated

Question 37

disadv to franchisor

Answer 37

profit shared
poor franchises might damage the business’ reputation
cost of supporting franchises can be high

Question 38

adv to franchisee

Answer 38

less risk
back-up support is given
predictable set-up costs
marketing may be organised

Question 39

disadv to franchisee

Answer 39

profit shared
strict contracts
lack of independence
can be expensive