Business Activity

Question 1

What are aims & objectives?

Answer 1

Aims the things that a business is trying to achieve, such as grow
larger, or make more profit

Objectives should be SMART targets – how they will achieve their
aims

Question 2

What is backwards vertical growth?

Answer 2

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

Question 3

What is a business plan?

Answer 3

A simple plan which sets out details on the products or service being sold, where the finance is to come from to start the business, how the product or service is to be marketed, and the market research to show there is a need for what is being sold

Question 4

What is capital?

Answer 4

Money raised to start or develop a business

Question 5

What is deed of partnership?

Answer 5

A document setting out the operations of the partnership, including amount of capital to be invested or how profits are shared

Question 6

What is diversification?

Answer 6

When a business merges with or takes over another business which there is no connection

Question 7

What is a dividend?

Answer 7

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

Question 8

What is an entrepreneur?

Answer 8

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

Question 9

What are the characteristics of an entrepreneur?

Answer 9

Risk taking
Creativity
Determination
Confidence

Question 10

What is external growth?

Answer 10

Growth of a business by takeover or merger

Question 11

What are external shareholders?

Answer 11

Has an interest in the business from the outside – examples include the local community, suppliers, customers and government

Question 12

What is finance?

Answer 12

A business word used instead of money. The finance needed to start a business is the money needed to do so

Question 13

What is forwards vertical growth?

Answer 13

When a business merges with, or takes over a business that it supplies good or services to

Question 14

What is growth?

Answer 14

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

Question 15

What is horizontal growth?

Answer 15

A merger or takeover where two businesses are involved in a similar operation, e.g. two electrical producers or two shops selling fashion clothing

Question 16

What are internal stakeholders?

Answer 16

Interested in the business from the inside – examples include the business owners and people who work in the business

Question 17

What is limited liability?

Answer 17

Where the responsibility for the debts of a business is limited to the amount invested by a shareholder.
A feature of private and public limited companies

Question 18

What are limited liability partnerships?

Answer 18

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 19

What is a market?

Answer 19

Where a business sells its goods and services

Question 20

What is a market share?

Answer 20

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

Question 21

What is a merger?

Answer 21

Where two or more businesses agree to join together

Question 22

What does operate mean?

Answer 22

A term used to explain how a business works

Question 23

What is organic growth?

Answer 23

Growth of a business internally by increasing sales. Sales can be increased in a number of different ways including opening more stores or developing new products

Question 24

What is a partnership?

Answer 24

A business owned by between two and twenty partners

Question 25

What is a private limited company?

Answer 25

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 26

What are resources?

Answer 26

The things a business sells needs to make it work, including finance, staff and materials

Question 27

What is satisficing?

Answer 27

Making just enough profit to provide the business owner with a decent living. More common in smaller businesses

Question 28

What are shareholders?

Answer 28

Are the part owners of a private or public limited company

Question 29

What is a sleeping partner?

Answer 29

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

Question 30

What is a sole trader?

Answer 30

A business owned by one person

Question 31

What is spotting an opportunity?

Answer 31

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

Question 32

What are stakeholders?

Answer 32

Groups or individuals who have an interest in business

Question 33

What is success?

Answer 33

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

Question 34

What is survival?

Answer 34

When a business just manages to keep going

Question 35

What is a takeover?

Answer 35

Where a business takes a controlling interest in another business.
This might be friendly or hostile

Question 36

What is unlimited liability?

Answer 36

Where the responsibility for all the debts of a business rests with the owners of the business.
A feature of sole traders and partnerships