Business Activity Flashcards
Purpose of business enterpreneurship
Spotting an opportunity
Developing an idea
Satisfying customer needs
Entrepreneur
Person who takes risk of starting and running a business enterprise
Characteristics of entrepreneur
Creativity, confidence, risk taking , determination
What does smart stand for
Specific, measurable, achievable, realistic, timely
Business plan components
Aims and objectives
Identify target market
Identify resources
Identify finance needed
Business objectives examples
Profit, survival, growth, providing service
Examples of stakeholders
Owners, employees, customers, suppliers, government, local community
Ways of organic growth
Increase market share
Gaining new customers
Increase product output
Develop new products
What is organic growth
Growth internally within the business
What is external growth
Growth of business by takeover or merger
What is horizontal growth
Merger or takeover where the two businesses involved are involved in similar operation
What is diversification
When a business merges with a business that it has no connection with
What is backward vertical growth
When a business takes over a business that supplies it with goods or services
What is forward vertical growth
When a business merges with a business that it supplies good to
What is a sole trader
business that is owned and run by one person
Advantages of a sole trader
it is quick and easy to set up as a sole trader.
Makes own decisions
Keep all profits
Disadvantages of sole trader
Unlimited liability
Work long hours
High levels of responsibility
Hard to raise money
What is a partnership
business that has between 2 and 20 owners
Advantages of partnership
-quick and easy to set up
-shared responsibility for debt by the owners
-partners bring more skills and ideas
-more capital available to invest
Disadvantages of partnership
-involve long work hours
-unlimited liability
-conflict amongst workers
-profits have to be shared
What is a private limited company
Usually a smaller business, it can sell shares to invited people only
Advantages of private limited company
-Shareholders can restrict who can buy shares
-limited liability
-be their own boss
-shares in business can be sold to raise money
Disadvantages of private limited companies
-lot of paperwork to set up
-some instances other people are able to view businesses financial information
-the business may require outside professional help to manage its finances
What is a public limited company
It can sell shares to anyone who wants to buy
