Business Basics Flashcards
What are the two ways businesses come about?
- Gaps on the market (new ideas)
- Adapting existing ideas
What is revenue and its equation?
- Money recieved from sales
- Quantity sold x price
What is profit and its equation?
- money remaining after costs
- revenue - costs
What is a brand?
An emotional connection, the experience
What are the customer needs?
- Choice
- Convenience
- Price
- Quality
What is a target market?
- who the product is aimed at, often by age, gender, lifestyle
What structure should you use to answer 3 mark questions?
P point
B because
L leads to
T therefore
What risks are associated with setting up a business?
- Business failure
- Financial loss
- Lack of security
Rewards associated with setting up a business
- Profit
- Independence
- Business success
Define Entrepreneur
An individual that takes a risk, organises resources and makes decisions
Define USP
Unique selling point
What is added value?
The difference between costs and price
What are some reasons for business failure?
- Lack of market research or planning
- Poor management
- Lower than expected sales
- Startup costs too high
- Unexpected shocks
- Not meeting customer demands
- Too reliant on small amount of customers
What are some financial aims of businesses?
- Survival
- Profit
- Market share
- Sales
- Financial security
What are some non-financial aims of businesses?
- Social objectives
- Personal satisfaction
- Challenge
- Independence and control
What is market share?
The percentage an individual business has of the whole market
What are dynamic factors?
Factors that can change the business environment that are beyond an entrepreneurs control
What are the types of dynamic factors?
- Social
- Technological
- Economic
- Environmental
- Legislatory
What is SMART (in terms of objectives)?
- Specific
- Measurable
- Achievable
- Realistic
- Time bound
What is a mission statement?
A general description of the overall aims of the business, can be just one sentence
What is the purpose of setting objectives?
- Gives direction
- Helps make decisions
- Brings focus for employees
- Allows planning
- Helps measure success
What is the difference between goods and services
- A good is an actual object, that is produced and consumed
- Services are activities and are intangible, provided by others
What is a business?
An organisation that exists to produce goods or supply services
Also known as an enterprise
What is the difference between aims and objectives?
- An aim is an overall long term target
- Objectives are the short term steps needed to meet the aim
