Business In The Real World

Question 1

What is a Business?

Answer 1

An organisation which is designed to supply a product or service.

Question 2

What is a product?

Answer 2

A product is anything that is capable of satisfying customers needs, it is tangible for example a mobile phone.

Question 3

What is a service?

Answer 3

An act that a business person carries out for you in exchange for money, for example dental treatment.

Question 4

What are the four factors of production?

Answer 4

Land - somewhere to produce the goods.
Labour - People to work in the business.
Capital - Money to get the business started.
Enterprise - This is the drive ir motivation from the owners to start a business.

Question 5

What is the primary sector?

Answer 5

The primary sector extracts raw materials from the planet, for example mining diamonds, coal.

Question 6

What is the secondary sector?

Answer 6

Are manufactured from raw materials.

Question 7

What is the tertiary sector?

Answer 7

Includes shops,reatail and banking.

Question 8

What is a sole trader?

Answer 8

A sole trader is when one person owns the whole business.

Question 9

What is a Partnership?

Answer 9

A partnership is a type of business that has between 2 and 20 owners. They decide to set up and run a business between them.

Question 10

What is a Private Limited Company? (Ltd)

Answer 10

A company that becomes its own legal property, this means if the business owes money you don’t have to pay out of your own pocket.

Question 11

What is a Public Limited Company?

Answer 11

A business that is legally allowed to sell its shares to the public.

Question 12

What is Companies House?

Answer 12

Any limited company or partnership has to register with Companies House.

Question 13

What is the deed of partnership?

Answer 13

A document that is signed by all the owners of a business setting out the terms they must abide by.

Question 14

What are Dividends?

Answer 14

A sum of money paid regularly by a company to its shareholders out of its profits.

Question 15

What are economies of scale.

Answer 15

Where the average costs (of production, distribution and sales) fall as the business increases the amount of product that it produces, distributes and sells.

Question 16

What is a grant?

Answer 16

A grant is money given to a business, usually by the government or lottery fund, that does not need to be paid back.

Question 17

What is a hostile takeover?

Answer 17

A takeover of one company by another that is accomplished without the agreement of the target company’s management.

Question 18

What is income tax?

Answer 18

Tax that someone pays based on their personal income (the money that they earn).

Question 19

What is limited liability?

Answer 19

When the business owner or owners are only responsible for business debts up to the value of their financial investment in the business.

Question 20

What are profits?

Answer 20

The amount of money made after all costs are deducted.

Question 21

What is a share capital?

Answer 21

The money raised when a business becomes a public limited company by offering shares in the business in return for capital.

Question 22

What are shareholders?

Answer 22

A part owner of a private or public limited company.

Question 23

What are shares?

Answer 23

A percentage or portion of a company.

Question 24

What is the Stock market?

Answer 24

A centralised market where business shares are traded.

Question 25

What is unlimited liability?

Answer 25

When the business owner or owners are personally responsible for all the debt of the business, no matter what the value.

Question 26

What is a stakeholder?

Answer 26

A stakeholder is any person, group of people or other organisation that has an interest in the activities of a business.

Question 27

What are internal stakeholders?

Answer 27

Internal stakeholders
work within a business, either making decisions or carrying them out.

Question 28

What are external stakeholders?

Answer 28

External stakeholders do not work within a business but are affected by its activities.

Question 29

What is a business plan?

Answer 29

A business plan is made up by several sections:
The business idea, the business aims and objectives, target market, revenue forecast, peojected costs and profit, cash flow forecast, sources of finance, location and marketing mix.

Question 30

What is the business idea?

Answer 30

what product or service the business will provide (this is usually the first section of a business plan)

Question 31

What is the business’ aims and objectives?

Answer 31

using the
SMART
principles

Question 32

What is the target market?

Answer 32

determined through market research

Question 33

What are the sources of finance?

Answer 33

long-term and short-term finance

Question 34

What is the location?

Answer 34

where the business will be located

Question 35

What is the marketing mix?

Answer 35

the four Ps (product, price, place and promotion)

Question 36

What is an Enterprise?

Answer 36

A company or business.

Question 37

What is an Entrepreneur?

Answer 37

A person who has the idea to start a business.