Business In The Real World Flashcards
Business
• A business is an organisation
which trades to make money,
these come in all shapes and sizes
Product
• A product is anything that is capable of satisfiying customer needs its tangible and can be touched
Service
A service is an act that a business person carries out for you in exchnage for money
Land
Somewhere to produce goods
Labour
People to work in the business
Captial
Money to get the business started
Enterprise
This is the drive or motivation from the owners to start a business
4 factors of production
Land
Labour
Capital
Enterprise
Opportunity cost
When making important decisions in business the cost of not selecting an alternitive is an opportunity cost
Reasons for strting a business
To produce goods
To supply a service
To distribute prodcuts
To fulfil a business opportunity
Providing a good or service
Social enterprise
Is a business which has the objetive of trading to help people or the planet rather than making a profit
How can social enterprises help people
Aim to tackle the effects of poverty
Provide jobs and tackle unemployment
Help children with a social need
Tackle the issue of an aging population
Help the homeless
Education and training inatiatives
How can social enterpises help the planet
To reduce pollution
To takle deforestation
Tohalt climate change
Primary sector
Extracts raw materials from the planet
Secondary setor
Goods are manufactured from raw materials into finished goods
Teritary sector
All the support services for business
Enterprise
A company or business
Entrepeneur
A person who starts a business and takes on financial risk in the hope of making a profit
Characteristics of an enterpreneurs
Hardworking
Initiative
Organised
Risk taker
Entrepreneur objectives
To be your own boss
Flexiable hours
To pursue an interest
To earn more money
To identify a gap in the market
Dissatisfaction with current job
Dynamic business enviroment
Business faces a constantly changing environment-to which it must adapt
Inflation rates
Is the rate of increase in prices for goods and services
Interest rates
The costs of borrowing
Unemployment rates
Is the percentage of people in the labour force that is unmemployed at any given time
Exchange rates
The costs of one currency expressed in the terms of another
Employment laws
Regulates the relationship between employers and employees
Health and saftey laws
To require employers and employees to not put others or themselfs in danger.
Counsumer laws
Any piece of government legislation designed to protect consumers from pooor qualitu prodcuts and poor business practices
Sole trader
Is a business which only has one owner
Types of sole traders
Small shop
Plumber
Electrician
Cleaner
Hairdresser
Website designer
Advantages of being a sole trader
Easy to set up
Making decisions quickly
Less capital needed
All profits kept by the owner
Can offer attention to customers
Dont have to make any information
They are thier own boss
Disadvantages of being a sole trader
Unlimated liability
Hard to raise money
Dont have any economies of scale
No one to take over for ill-health
No one to share ideas with
Only one set of skills
Can feel isolated
Unlimated liability
The business and the owner are one legal entity
Partnership
All just owner of the business
Partnership jobs
Doctors
Dentist
Accountants
Vets
Solicitors
Partnership advantages
Easy to set up
Small capital is needed
Easier to raise extra capital than sole
Profits go to partners
Good worker realtionships
Partners can hare problems and decisions
Partnership disadvantages
Unlimated liability
Trust and reliability can be a issue
Partners can have disagreement
Sharing profits
Control of business
Limated liability
Limited liability protects a business owner’s personal
funds from being used to pay business debts.