Business In The Real World Flashcards
What is an entrepreneur?
It is a person who sets up a business or businesses, taking on financial risks in hope of profit
What skills are needed for entrepreneurs?
Innovative - new ideas
Hardworking
Risk takers
Why do people set up their own business?
Allows independence and control in your on work
To pursue opportunities that you’re passionate about
What are the 4 factors of production?
Capital - people who produce goods and services (factories & schools)
Enterprise - entrepreneurs who take risks and create things from the other 3 factors of production
Land - includes all the earth’s natural resources
Labour - people who contribute to the production process
What are the sectors of production?
Primary - industry involved in the extraction and production of raw materials & natural resources
Secondary - revolves around manufacturing, transforming raw materials & natural resources into artificial resources
Tertiary - providing a wide range of services to the economy
What is a stakeholder?
It is anyone who is affected by a business
List 3 factors that influence location
Target market
Competition
Raw materials
What is an aim?
The overall long term target of the business
What is an objective?
Milestones which help achieve the business’s aims
What are the advantages of expansion?
Increased market share
Economies of scale
Diversification of risk
What are the disadvantages of expansion?
Loss of control
Increased complexity and management challenges
Overextensions of resources
Name 4 sections of a business plan
Executive summary - a brief overview of the business plans
Company description- info about what the business does
Market analysis - the details of the target market
Organisation and management - how the business is structured
Partnerships advantages and disadvantages
Advantages: less financial burden, shared responsibility, additional knowledge
Disadvantages: disagreements, shared profits, decision-making
Sole traders advantages and disadvantages
Advantages: complete control, less paperwork, total privacy
Disadvantages: unlimited liability, sole responsibility, multiple roles in the business
PLC advantages and disadvantages
Advantages: limited liability, protection from outside influence, be their own boss
Disadvantages: more paperwork, time consuming to set up, lack of flexibility
