Business activity

Question 1

Entrepreneur

Answer 1

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

Question 2

Spotting an opportunity

Answer 2

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

Question 3

Enterprising characteristics

Answer 3

Are the features of an entrepreneur, which include being determined, creative and having ability to take risks.

Question 4

Business plan

Answer 4

Is a simple plan which sets out details on the product or service being sold, where the finance is to come from to start the business, how the product is to be marketed and the market research carried out.

Question 5

Finance

Answer 5

Finance is needed to start a business - maybe a loan or grant.

Question 6

Success

Answer 6

For a business can take many forms, including making a profit, surviving and providing a good service.

Question 7

Resources

Answer 7

Are the things a business needs to make it work, including land, labour, capital and enterprise.

Question 8

Limited liability

Answer 8

Is where the responsibility for the debts of a business is limited to the amount invested by a shareholder. They will not be made to sell personal belongings to pay off business debt. A feature of private and public limited companies.

Question 9

Unlimited liability

Answer 9

Is where the responsibility for all the debts of a business rests with the owners of the business. A feature of sole traders and partnerships who may need to sell their own personal belongings to pay off business debt.

Question 10

Sole trader

Answer 10

Is a business owned by one person. They have sole responsibility but benefit if the business is a success.

Question 11

Partnership

Answer 11

Is a business owned by between two and 20 partners.

Question 12

Private limited company

Answer 12

Is often (but not always) a smaller business. Owned by at least two shareholders. Shares cannot be sold to the general public. Has Ltd after its name.

Question 13

Public limited company

Answer 13

Is a large business, where shares can be sold to the general public enabling vast sums of money to be raised to develop the company. Has plc after its name.

Question 14

Deed of partnership

Answer 14

Is a document setting out the operations of the partnership, including amount of capital to be invested and how profits will be shared.

Question 15

Capital

Answer 15

Is money raised to start or develop a business.

Question 16

Sleeping partner

Answer 16

Is a partner who invests in a partnership but has no part in the running of the business.

Question 17

Limited liability partnership

Answer 17

Are part partnership part limited company. Owners are members, not partners. They have limited liability and have to make their finances available to the public.

Question 18

Shareholders

Answer 18

Are the owners of a private or public limited company.

Question 19

Dividend

Answer 19

Is the money paid to shareholders from the profits of a limited company. This is the reward for the shareholder taking a risk by investing money in the company.

Question 20

Market share

Answer 20

Is the share of the total market for a product or service and is shown as a percentage.

Question 21

Business aims and objectives

Answer 21

Are what the business aims to achieve and include survival, profit, growth and providing a services.

Question 22

Profit

Answer 22

Is the difference between revenue and costs.

Question 23

Survival

Answer 23

Is when a business just manages to keep going.

Question 24

Growth

Answer 24

Is where a business becomes larger, for example by making more products or opening more places where goods and services are sold.

Question 25

Providing a service

Answer 25

Is where a business makes sure that the needs of the customer are being met.

Question 26

Stakeholder

Answer 26

Are groups or individuals who have an interest in a business.

Question 27

Internal stakeholders

Answer 27

Are the business owners and employees who are in the business.

Question 28

External stakeholders

Answer 28

Are the local community, suppliers, customers and government.

Question 29

Organic Growth

Answer 29

Is growth of a business internally by increasing sales. eg sales can be increased by expanding the product mix, developing new markets.

Question 30

Merger

Answer 30

Is where two or more businesses agree to join together.

Question 31

External Growth

Answer 31

Is growth of a business by takeover or merger.

Question 32

Takeover

Answer 32

Is where a business takes a controlling interest in another business.

Question 33

Horizontal Growth

Answer 33

Is a merger or takeover where two businesses are involved in a similar operation eg two fashion retailers.

Question 34

Backwards vertical growth

Answer 34

Is when a business merges with, or takes over a business that supplies it with goods or services.

Question 35

Forwards vertical growth

Answer 35

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

Question 36

Diversification

Answer 36

Is when a business merges with or takes over another business with which there is no connection.

Question 37

Risk

Answer 37

The bad things that can happen if you go ahead and open your own business e.g. you lose all your savings that have been invested.

Question 38

Reward

Answer 38

The good things that can happen if you go ahead and open your own business e.g. you gain lots of profit so can have a good home life.