Business Activity

Question 1

Purpose of business enterpreneurship

Answer 1

Spotting an opportunity
Developing an idea
Satisfying customer needs

Question 2

Entrepreneur

Answer 2

Person who takes risk of starting and running a business enterprise

Question 3

Characteristics of entrepreneur

Answer 3

Creativity, confidence, risk taking , determination

Question 4

What does smart stand for

Answer 4

Specific, measurable, achievable, realistic, timely

Question 5

Business plan components

Answer 5

Aims and objectives
Identify target market
Identify resources
Identify finance needed

Question 6

Business objectives examples

Answer 6

Profit, survival, growth, providing service

Question 7

Examples of stakeholders

Answer 7

Owners, employees, customers, suppliers, government, local community

Question 8

Ways of organic growth

Answer 8

Increase market share
Gaining new customers
Increase product output
Develop new products

Question 9

What is organic growth

Answer 9

Growth internally within the business

Question 10

What is external growth

Answer 10

Growth of business by takeover or merger

Question 11

What is horizontal growth

Answer 11

Merger or takeover where the two businesses involved are involved in similar operation

Question 12

What is diversification

Answer 12

When a business merges with a business that it has no connection with

Question 13

What is backward vertical growth

Answer 13

When a business takes over a business that supplies it with goods or services

Question 14

What is forward vertical growth

Answer 14

When a business merges with a business that it supplies good to

Question 15

What is a sole trader

Answer 15

business that is owned and run by one person

Question 16

Advantages of a sole trader

Answer 16

it is quick and easy to set up as a sole trader.
Makes own decisions
Keep all profits

Question 17

Disadvantages of sole trader

Answer 17

Unlimited liability
Work long hours
High levels of responsibility
Hard to raise money

Question 18

What is a partnership

Answer 18

business that has between 2 and 20 owners

Question 19

Advantages of partnership

Answer 19

-quick and easy to set up
-shared responsibility for debt by the owners
-partners bring more skills and ideas
-more capital available to invest

Question 20

Disadvantages of partnership

Answer 20

-involve long work hours
-unlimited liability
-conflict amongst workers
-profits have to be shared

Question 21

What is a private limited company

Answer 21

Usually a smaller business, it can sell shares to invited people only

Question 22

Advantages of private limited company

Answer 22

-Shareholders can restrict who can buy shares
-limited liability
-be their own boss
-shares in business can be sold to raise money

Question 23

Disadvantages of private limited companies

Answer 23

-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

Question 24

What is a public limited company

Answer 24

It can sell shares to anyone who wants to buy

Question 25

Advantages of a public limited company

Answer 25

-business can raise addiction finance easily
-shareholders have limited liability
-business continues even if shareholders sell their shares or die

Question 26

Disadvantages of a public limited company

Answer 26

-expensive to set up
-takes a long time to set up (lots of legal documents)
-public can see information about the business
-shareholders may clash when making decisions

Question 27

Differences between private limited company and public limited company

Answer 27

A private limited company (Ltd) does not publically trade shares
In a Private limited company it is harder to raise capital as there is less shareholders

Question 28

Advantage of external growth

Answer 28

Increased market share
Reduced competitors

Question 29

Disadvantages of external growth

Answer 29

Conflict of opinions
Very expensive
Managers may lack experience to deal with other business