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Business > Business and People > Flashcards

Business and People Flashcards

1
Q

What is a sole trader?

A

It is where a person runs a business on their own

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2
Q

What are the advantages of being a sole trader?

A
  • costs to set up are low
  • you keep all the profits
  • you can make all the decisions
  • few legal requirements
  • the owner often has close persona contact with customers
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3
Q

What are the disadvantages of being a sole trader?

A
  • limited access to finance
  • owner is responsible for all aspects of the business
  • owner has to make all the decisions
  • hard work and long hours
  • unlimited liability
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4
Q

What is a partnership?

A

A business which is run by 2 or more people

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5
Q

What are the advantages of a partnership?

A
  • the workload, responsibilities and decision making are shared
  • individual partners can specialise in an area of the business
  • greater access to finance
  • can continue trading after partner leaves
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6
Q

What are the disadvantages of a partnership?

A
  • unlimited liability
  • disagreements between partners
  • limited finance
  • trust
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7
Q

What is the Deed of Partnership?

A

It is a contract setting out the rules of the partnership

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8
Q

How do you set up a Private Limited Company (Ltd)?

A

1) Memorandum of Association
2) Articles of Association sent to Registrar of Companies
3) Registrar issues Certificate of Incorporation
4) Company can begin trading

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9
Q

Name two things that are needed to be included in the Deed of Partnership.

A
  • how much each partner invested

- the names of the partners

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10
Q

What is a franchise?

A

It is when you buy the rights to sell products under an established name e.g. Avon.

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11
Q

What are the advantages of being a franchise?

A
  • already well established
  • they’ll supply you with uniforms and other materials
  • they’ll train you and your employees
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12
Q

What are the disadvantages of being a franchise?

A
  • expensive royalty (to buy franchise)
  • not your own business
  • they will take a percentage of your profit
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13
Q

How do you set up a Public Limited Company (PLC)?

A

1) Memorandum of Association
2) Articles of association sent to Registrar of companies
3) Registrar issues Certificate of Incorporation
3) Company issues prospects
4) Shares are issued
5) Registrar of companies draws up a certificate of trading
6) company can begin trading

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14
Q

What does a PLC need to set up?

A

a board of directors who have an annual meeting called an AGM. they discuss the accounts sell shares on the stock market.

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15
Q

What are the advantages of PLC?

A
  • easier to raise finance
  • limited liability
  • greater chance of becoming a larger business
  • benefit from economies of scale
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16
Q

What are the disadvantages of PLC?

A
  • you need to have a lot of money to set up the business
  • a lot of paper work
  • time consuming
  • loss of control
  • some of the profit to pay fro dividends
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17
Q

What is dividends?

A

a sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves).

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18
Q

What is the Public Sector?

A

It is a business that is government run e.g. schools, NHS, bin service.

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19
Q

What is public good?

A

when you provides for one and everyone benefits e.g. roads

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20
Q

What is merit good?

A

where people wouldn’t use it if they had to pay for it e.g. school and health service

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21
Q

What is expensive business?

A

when the government would set up a business which would be expensive to set up

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22
Q

What are the objectives of the public sector?

A

to provide a service and break even

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23
Q

What is the public sector’s finance?

A

taxasation from tax payers

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24
Q

What is Privatisation?

A

It is the selling off a government run business to the private sector (non-government run businesses).

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25
Q

Arguments for privatisation from the government.

A
  • no longer have responsibility of the business anymore
  • they’ll get money when it is sold off
  • they would save more money because they aren’t spending it on anymore
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26
Q

Arguments against privatisation?

A
  • greater funds to run the business
  • some businesses need to be government run/ services provided
  • Monopoly: governments should provide monopoly situations
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27
Q

What does SMART stand for?

A 
Specific
Measurable
Achievable
Realistic
Time
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28
Q

What’s a stakeholer?

A

any person or organisation that have an interest in the business.

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29
Q

Examples of stakeholders?

A
  • Employee:to get a promotion
  • Customers: to get quality but cheap proucts
  • Government: they’ll be employing people, corporation tax
  • Banks: paying back debts
  • Local community: more jobs available
  • Suppliers: more products sold, more money
  • Competitors: for the business decrease so they can increase in market.
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30
Q

What is a Multinational Company?

A

the head office is in one country, operates in at least 3 other countries

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31
Q

Advantages of a multinational company.

A
  • larger market
  • lower costs (raw materials)
  • benefit from economies of scale
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32
Q

Disadvantages of multinational company.

A
  • hard to communicate with everyone across the globe (language barrier)
  • loss of control: hard to control the company in another country
  • transportation: high cost to ship products around the world
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33
Q

What’s a cooperative?

A

it’s a business where the workers are the owners. The idea is that workers will work harder to increase the profits. Workers al receive the profits.

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34
Q

Characteristics of an entrepreneur?

A
  • business ideas
  • they’ll take a risk
  • have business ability
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35
Q

The sectors of the economy?

A

1) primary: production of goods in natural state e.g. mining
2) secondary: manufacturing of raw materials
3) tertiary: selling of goods

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36
Q

reasons for decline in the UK primary sector

A
  • cheaper raw materials abroad
  • we have used up a lot of or own raw materials
  • people don’t want to work in the primary sector because it’s not good pay
  • a lot of work is done by machinery
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37
Q

reasons for decline in the UK secondary sector

A
  • not very good pay
  • cheaper to manufacture abroad e.g. China
  • haven’t got enough raw materials
  • better machinery is used to produce
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38
Q

reasons for growth in the UK tertiary sector

A

-good pay
-more jobs
-more people have money therefore they’ll spend it more on leisure and services
expanding population means more demand for services

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39
Q

5 factors that influence location of a business

A
  • facilities
  • suppliers
  • competitors
  • population density of market/ labour
  • transport
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40
Q

How can the government influence the location for the business?

A
  • set up grants/subsidy: the government gives the business a certain amount of money to put them into a location
  • cheaper rent
  • space/ facilities: government build industrial estates for business to use
  • lower tax: lower coporation tax
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41
Q

4 ways for business to grow

A
  • organic growth: internal e.g. more employees
  • merger: when 2 businesses become 1 e.g. currys and pc world
  • joint venture: where 2 firms work with each other e.g. jaguar and land rover
  • takeover: when a business buys/ takes over another business e.g. kraft took over cadburys
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42
Q

horizontal integration?

A

where a business purchases another business which is on the same stage of production e.g. competitor
an advantage is you know what you’re doing

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43
Q

backwards vertical?

A

where you buy your suppliers

an advantage is you know that you are guaranteed a supplier

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44
Q

forwards vertical?

A

where you buy the retailer/shop

an advantage is you know that you are guaranteed to have an outler

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45
Q

diversification?

A

when you buy something that is unrelated/ completely different from their market
an advantage is that it could be a bigger market.

46
Q

name the stages (in order) of the recruitment process

A

1) job analysis
2) person specification
3) job description
4) advertisement

47
Q

name the stages (in order) of the selection process

A

1) apply
2) shortlist
3) interview
4) select & appoint

48
Q

What three documents must a company have to be classed as incorporated?

A

Form IN01
Memorandum of association
Articles of association

49
Q

What is an incorporated business?

A

when the owner of the business is completely separate from their business

50
Q

What is the TUC?

A

Trade Union Congress

51
Q

What is ACAS?

A

Advisory, Conciliation, Arbitration, Service

it is an organisation exists to try to settle disputes between workers and employers.

52
Q

A body, like BBC, set up to run a state owned business

A

public corporation

53
Q

What is a trade union?

A

an organised association of workers in a trade, group of trades, or profession, formed to protect and further theri rights and interests

54
Q

Why do people join trade unions?

A
  • negotiate better pay
  • negotiate better working conditions, like more holidays or improved health and safety
  • provide training for new skills
  • give general advice and support
55
Q

What’s on the job training?

A

when they train you while you’re working e.g. waitressing

56
Q

Advantages and disadvantages of on the job training.

A

Advantages: easier to explain, training is immediate, cheaper than other ways of training
Disadvantages: you can pick up bad habits, quality may be affected, can lose customers if it takes too long because you’re producing less

57
Q

What’s off the job training?

A

where the workers either leaves the work place or is trained at a different part of the work place

58
Q

Advantages and disadvantages of off the job training.

A

Advantages: taught by a qualified person, more detailed training, would get a qualification
Disadvantages: expensive, have to travel, not producing

59
Q

What’s coaching?

A

to help develop people’e skills and abilities

60
Q

What’s mentoring?

A

to deal with personal issues and help to build your confidence

61
Q

What’s an apprenticeship?

A

where you go to work for 4 days and 1 day at college (on and off the job training).

62
Q

From bottom to top name the levels of Maslow’s hierarchy.

A

Basic needs, Safety needs, Social needs, Self-esteem, Self actualisation

63
Q

Financial motivation ways?

A

Commission, Shares, Bonus, Tips, Profit related pay, Piece rate, Fringe benefits

64
Q

Non-financial motivation ways?

A 
Job rotation (rotate around different jobs), Job enlargement (increase variety of tasks per indivdual), Job enrichment (variety in job and some responsibility), Job empowerment (doing different jobs) 
Award scheme (employee of the month)
65
Q

Leadership

A

Autocratic: all decisions are made by the person in charge
Democratic: 1) persuasive- listen to view points from workers but the leader will decide
2) consultative- listen to everybody then come to a group decision

(laissez faire- leader is less involved)

66
Q

Characteristics of a flat hierarchy

A
  • few levels of hierarchy
  • short chain of command
  • wider span of control (one person in charge of more)
  • information flows quicker
  • decisions can be made quicker
67
Q

Characteristics of a tall hierarchy

A
  • more levels of hierarchy
  • long chain of command
  • thinner span of control
  • greater control
  • promotion for workers
  • more organised, clean lines of authority/communication
68
Q

ways of communication

A

verbal, written and visual

69
Q

Barriers to effective communication

A

language, dialect, clarity (can’t read it), bad signal, lack of feedback from receiver, attitude of sender/ receiver.

70
Q

ICT & communication ways

A

email, internet, word document, edexcel, powerpoint, databases, intrenet, skype/video

71
Q

Job production

A

where products are made individually (handmade)

72
Q

Batch production

A

producing one type of product for a while then changing to another product

73
Q

Flow production

A

one kind of product is made continuously. The goods ae mass produced

74
Q

Process production

A

raw materials are turned into finished products

75
Q

what is TQM?

A

Total Quality Management
carefully monitoring every bit of process of production to ensure it is to the best quality so to have a greater reputation and customer satisfaction

76
Q

Benefits of TQM

A
  • reduces wastage
  • saves time (long run)
  • improves quality
  • motivation for workers
  • cheaper in the long run
77
Q

Drawbacks of TQM

A
  • high set up cost
  • takes time to get used to for the workers
  • slows down the process
  • some workers don’t like change
78
Q

Define what lean production is

A

a Japanese approach to management that focuses on cutting out waste, whilst ensuring quality. This approach can be applied to all aspects of a business

79
Q

What is Just In Time (JIT)?

A

keeping stock to an absolute minimum and the raw materials are ordered only when they are needed so to be efficient and to be taxed minimally on storage

80
Q

What’s break even?

A

how many products it takes to sell to cover your total costs of the business

81
Q

What’s fixed costs?

A

the costs that we still have to pay no matter how much we sell

82
Q

What’s variable costs?

A

the costs which change. The more you produce the more this cost increases

83
Q

what is the break even point (BEP) calculation?

A

fixed cost/(price-variable cost)

always round up e.g. 10.4 would be 11

84
Q

What’s margin of safety?

A

the point providing the sales are above the breakeven point

85
Q

Calculation for total costs

A

fixed costs + variable costs

86
Q

Calculation for total revenue

A

price * number sold

87
Q

Calculation for profit

A

total revenue - total costs

88
Q

Reasons for Break Even Analysis

A
  • helps you plan
  • you can set targets for sales and production
  • you can solve problems easier if you don’t break even
  • tells you if you actually ever will break even
  • helps you borrow money
89
Q

Limitations of breakeven

A
  • ignore other factors
  • only shows one product
  • does not show demand
90
Q

What is direct costs?

A

costs involved in making the product (e.g. labour pay, materials etc.)

91
Q

What is indirect costs?

A

other costs that have to be paid (e.g. rent of a factory)

92
Q

economies of scale

managerial?

A

a business that can employ specialist managers

93
Q

economies of scale

purchasing?

A

a business given a discount for buying in bulk

94
Q

economies of scale

technological?

A

a business the saves on production cost by using better equipment

95
Q

economies of scale

marketing?

A

a business saves on advertising and transport

96
Q

economies of scale

financial?

A

a business that does not have to pay much money to raise finance

97
Q

economies of scale

risk bearing?

A

a business that has a range of products/ services relying on one product

98
Q

What’s diseconomies of scale?

A

average cost of production increases the more you produce

reasons why? loss of control & poor communication

99
Q

finance methods

A

owners funds, retained profits, sales and leaseback, overdraft, trade credit, debt factoring, leasing, bank loans, issuing shares, mortgage, government grants, hire purchase

100
Q

calculation for gross profit margin

A

gross profit/ total revenue *100

101
Q

calculation for net profit margin

A

net profit/ total revenue * 100

102
Q

What is cash flow?

A

it is a record of money coming in and going out of a business

103
Q

What’s a monopoly?

A

when there are on competitors just one supplier for one main product.

104
Q

What’s market share?

A

the amount of the total market that one firm accounts for

105
Q

Calculation for market share

A

firms sales/ total market sale *100

106
Q

What’s business ethics?

A

Doing what is morally right in the eye of the stakeholders

107
Q

Why are businesses encouraged to be more sustainable?

A

to ensure that there is enough resources for future generations

108
Q

list the taxes made by the government

A
  • duties; tax on cigarettes and alcohol
  • road tax: to pay for materials & workers
  • income tax
  • VAT: charged on products you buy
  • corporation tax
  • windfall tax: tax on money you came into
  • inheritance tax
  • business tax
  • national insurance: to pay for NHS
109
Q

What’s interest rates?

A

extra money paid on loans and extra money received on savings

110
Q

What’s inflation?

A

when prices are going up

Business (1 decks)

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