Business Activity Flashcards
What are aims & objectives?
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
What is backwards vertical growth?
When a business merges with, or takes over a business that supplies it with goods or services
What is a business plan?
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
What is capital?
Money raised to start or develop a business
What is deed of partnership?
A document setting out the operations of the partnership, including amount of capital to be invested or how profits are shared
What is diversification?
When a business merges with or takes over another business which there is no connection
What is a dividend?
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
What is an entrepreneur?
A person who takes the risk of starting and running a business enterprise
What are the characteristics of an entrepreneur?
Risk taking
Creativity
Determination
Confidence
What is external growth?
Growth of a business by takeover or merger
What are external shareholders?
Has an interest in the business from the outside – examples include the local community, suppliers, customers and government
What is finance?
A business word used instead of money. The finance needed to start a business is the money needed to do so
What is forwards vertical growth?
When a business merges with, or takes over a business that it supplies good or services to
What is growth?
Where a business becomes larger, for example by making more products or opening more places where goods and services are sold
What is horizontal growth?
A merger or takeover where two businesses are involved in a similar operation, e.g. two electrical producers or two shops selling fashion clothing
What are internal stakeholders?
Interested in the business from the inside – examples include the business owners and people who work in the business
What is limited liability?
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
What are limited liability partnerships?
Part partnership, part limited company. Owners are members, not partners. They have limited liability and have to make their finances available to the public
What is a market?
Where a business sells its goods and services
What is a market share?
The share of the total market for a product or service and is shown as a percentage
What is a merger?
Where two or more businesses agree to join together
What does operate mean?
A term used to explain how a business works
What is organic growth?
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
What is a partnership?
A business owned by between two and twenty partners
What is a private limited company?
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
What are resources?
The things a business sells needs to make it work, including finance, staff and materials
What is satisficing?
Making just enough profit to provide the business owner with a decent living. More common in smaller businesses
What are shareholders?
Are the part owners of a private or public limited company
What is a sleeping partner?
A partner who invests in a partnership but has no part in the running of the business
What is a sole trader?
A business owned by one person
What is spotting an opportunity?
The ability to see the need for a particular product or service that customers need
What are stakeholders?
Groups or individuals who have an interest in business
What is success?
For a business, can take many forms, including making profit, surviving and providing a good service to customers
What is survival?
When a business just manages to keep going
What is a takeover?
Where a business takes a controlling interest in another business.
This might be friendly or hostile
What is unlimited liability?
Where the responsibility for all the debts of a business rests with the owners of the business.
A feature of sole traders and partnerships
