Business Activity

Question 1

growth

Answer 1

When a business becomes larger by making more products or opening more outlets.

Question 2

resources

Answer 2

The thing a business needs to make it work.

Question 3

aims and objectives

Answer 3

The goals that the business is trying to achieve.

Question 4

business objectives

Answer 4

What a business is trying to achieve.

Question 5

external stakeholders

Answer 5

Stakeholders from outside the business.
- Suppliers
- Customers
- Local community
- Government

Question 6

internal stakeholders

Answer 6

Stakeholders from within the business.
- Employees
- Owners

Question 7

markets

Answer 7

Where businesses sell their goods and services.

Question 8

shareholders

Answer 8

The owners of a PLC or Ltd.

Question 9

stakeholders

Answer 9

An individual or group that have an interest in a business.

Question 10

advantages of a private limited company

Answer 10

• Limited liability
• Continuity
• Can raise capital more easily
• Control over share sale

Question 11

advantages of a public limited company

Answer 11

• Can raise large amounts of capital
• Easier to borrow money
• Limited liability for shareholders

Question 12

advantages of a partnership

Answer 12

• More capital available
• Easy to set up
• More skills available
• Shared workload
• Financial information is kept private

Question 13

advantages of a sole trader

Answer 13

• Easy to set up
• Little finance required
• Full control
• Keep all the profits
• Financial information is kept private

Question 14

disadvantages of a partnership

Answer 14

• Shared profit
• Unlimited liability
• Shortage of capital
• Slower decision making
• No continuity

Question 15

disadvantages of a private limited company

Answer 15

• Financial information available to public
• Complex and expensive to set up
• Sale of shares is restricted
• Dividends to be paid

Question 16

disadvantages of a public limited company

Answer 16

• Possibility of a takeover
• Complex and expensive to set up
• Hard to manage as it is so large
• Financial information available to public

Question 17

disadvantages of a sole trader

Answer 17

• Unlimited liability
• Business stops if ill or on holiday
• Long working hours
• Shortage of capital
• Skills shortage
• No continuity

Question 18

enterprising characteristics

Answer 18

• Determination
• Confidence
• Creativity
• Resilience
• Risk-taker

Question 19

business plan

Answer 19

A simple plan which sets out the details of the business.

Question 20

merger

Answer 20

Two or more businesses agree to join together to become one large business.

Question 21

partnership

Answer 21

A business owned by 2- 20 people.

Question 22

private limited company (Ltd)

Answer 22

A business that can only sell shares to family and friends.

Question 23

public limited company (PLC)

Answer 23

A business that can sell shares to anyone.

Question 24

sole trader

Answer 24

A business owned by one person.

Question 25

start-up

Answer 25

A new business enterprise.

Question 26

takeover

Answer 26

When one business takes a controlling interest of another business.

Question 27

entrepreneur

Answer 27

A person who takes the risk of starting and running a business enterprise.

Question 28

backwards vertical growth

Answer 28

A business merges with or takes over a business that supplies it with goods or services.

Question 29

capital

Answer 29

The money raised to start or develop a business.

Question 30

diversification

Answer 30

A business merges with or takes over a business with which is has no connection.

Question 31

dividend

Answer 31

Money paid to shareholders from the profits as a return on their investment.

Question 32

external growth

Answer 32

Growth achieved through a takeover or merger.

Question 33

finance

Answer 33

Money needed to start up/run a business.

Question 34

forward vertical growth

Answer 34

A business merges with or takes over a business that it supplies goods or services to.

Question 35

horizontal growth

Answer 35

Merger or takeover where 2 businesses are involved in the same industry.

Question 36

limited liability

Answer 36

The responsibility for paying back only the money that was invested into the business.

Question 37

market share

Answer 37

The percentage of a market a business controls.

Question 38

organic growth

Answer 38

Internal growth of a business by increasing sales.

Question 39

profit

Answer 39

Revenue - costs

Question 40

providing a service

Answer 40

Meeting the needs of customers.

Question 41

satisfying

Answer 41

The business makes enough profit to enable it to meet its needs but not as much profit as possible.

Question 42

spotting a opportunity

Answer 42

The ability to see the need for a particular product or service that customers need.

Question 43

success

Answer 43

Success can be measured in different ways e.g. survival, profit, good customer service.

Question 44

survival

Answer 44

When a business just manages to keep going.

Question 45

deed of partnership

Answer 45

A document setting out terms of partnership e.g. how profits are shared.

Question 46

unlimited liability

Answer 46

The responsibility for paying back ALL the debts, so personal possessions can be at risk.