Business activity Flashcards
forwards vertical intergration
when a business takes over another business to control the direct
distribution of a business product
consumer good
a good sold to the public for use by them
producer good
a good sold to another business
conglomerate intergration
when a business joins with another in a different type of production process
horizontal integration
they buying or merger of another businesses producing the same or similar products
vertical backwards integration
when the suppliers of a business are taken over by that business
tertiary
service/ sold (retail)
secondary sector
production- making it
primary sector
extractions of raw materials (farming, fishing)
private sector
includes all businesses owned by private individuals
public sector
- paid for by public via tax
- these are NHS, armed forces
personal direct services
- aimed at consumers
- example in personal trainer, hairdressers
non durable goods
these are goods which are only used or consumed a single time
consumer= milk , veg
producer= oil chemicals
durable goods
these are goods that have a long life, they will be used until they break or are replaced
producer= car engines
consumer= tv, shoes
what are the rewards of being an entrepreneur
- money
- doing something you enjoy
- profitable
- success
- meet family needs
- avoid job disatifaction
how do you calculate revenue
number of customers
X
selling price
shareholder
a shareholder is a stakeholder, but not all stakeholders are shareholders
commercial services
- aimed at businesses
- some include marketing, market research
how do you calculate BEP
fixed costs
/
contribution
factors impacting site
- ease of access to the site
-footfall
-costs - proximity to competition
- personal reasons
how do you calculate profit/ loss
revenue - total costs
external growth
involves increasing the size of a business by buying other businesses
margin of safety
the difference between your breakeven point and actual sales that have been made
internal growth
this is where a business grows by developing the size of the business, by its sales, revenue
how do you calculate variable costs
number of customers
X
variable cost per person
diversification
allows business to enter a different market, this enable the business to spread its risks
outsourcing
outsourcing occurs when a business pays another firm to produce its products. this allows the business to increase its capacity quickly with minimal investment
how do you calculate contribution
selling price - variable cost
what are the 4 factors of production
land, labour , capital, entrepreneur
location
businesses location refers to the geological area of location such as a certain country
limitations of breakeven
all just a prediction
advantages of breakeven
- can see how many items you need to become profitable
- see if business is viable
site
finding a site for a business, considers a physical location with more specific factors
STAKEHOLDERS
a stakeholder is a person or organisation that affect or are affected by an organisation
open new stores + ecommerce
- sometimes a business will open a new store under the same name in a different location
- sometimes to expand a business they open an online store
what is a franchisor
is a business with an established brand
what is a franchisee
a franchisee is a person or business that pays a franchisor to do business under their name/ brand
whats franchising
a franchise is a way of doing business that involves a franchisee and franchisor
how do you calculate total cost
fixed costs + variable costs
factors that affect location
- infrastructure
- the market
- raw materials
- labour
- government assistance
- historical
takeover
when one business gains control of another
characteristics of an entrepreneur
- creative
-risk taking - determined
- confident
merger
when two or more businesses join together to form a business
what are the risks of being an entrepreneur
- loss of savings
- demand
- business fail
- unpredictable
- financial
cashflow
showing how your profit and loss may be
skills
shows banks what skills you have for your business
financial plan
showing bank what your spending money on
business plan
Helps in decision-making by showing
the aims and objectives of a business and the
strategies and requirements needed to achieve
these. It also provides information to banks
why make a business plan?
- It will be needed by banks before lending
money - It shows how the business will be run
- It shows the business has been researched
and thought through - It shows opportunities and problems
what is in a business plan?
- aims of business
-cashflow forecast
-owners CV
-type of ownership
-marketing
-location
-financial information
needs
: Items that you have to have in
order to survive.
wants
Items that you would
like to have but are not necessary to your survival.
They enhance your lifestyle
SMART
- specific
- measurable
- achievable
- relevant
- timed
aims + objectives
profit maximization
survival
provide a service
market share
be ethical
