Business activity and influences on business

Question 1

Define SMART

Answer 1

Specific
Measurable
Achievable
Realistic
Time specific

Question 2

State 5 types of financial objectives

Answer 2

Survival
Profit
Sales
Market share
Financial security

Question 3

State 4 types of non-financial objectives

Answer 3

Social
Personal satisfaction
Challenge
Independence and control

Question 4

Reasons why business objectives may change

Answer 4

market conditions
technology
performance
legislation
internal reasons

Question 5

The main types of business ownerships

Answer 5

•sole trader
•partnerships
•private limited companies
•public limited companies
• public corporations

Question 6

Advantages and disadvantages of soletrader

Answer 6

ADVANTAGES :
• Easy and not expensive to set up
• Owner has complete control
• Recieves all profit
• Flexible

DISADVANTAGES :
• Unlimited liability
• Long work hours
• Lots of responsibility
• Limited skill set

Question 7

Advantages and disadvantages of partnerships

Answer 7

ADVANTAGES :
• Easy and not expensive to set up
• Shared responsibility and decision-making
• More skills and knowledge available
• Increases access to finance

DISADVANTAGES:
• Unlimited liability
• Partners’ decisions are legally binding on all owners
• Potentional conflict
• Profits shared equally

Question 8

The advantages and disadvantages of a private limited company

Answer 8

ADVANTAGES:
• Limited liability
• Access to greater finance
• Ownership can be easily transferred by selling shares
• Business can continuity

DISADVANTAGES:
• Expensive and time-consuming to set up
• Annual financial reporting and inspection required
• Complex operational rules

Question 9

The advantages and disadvantages of a public corporations

Answer 9

ADVANTAGES:

DISADVANTAGES: