Business In The Real World ❤️ Flashcards
Business sectors (3)
Primary = raw materials (farming)
Secondary = manufactured goods (factories)
Tertiary = provides services (shops)
What are entrepreneurs?
Someone who takes on the risks of enterprise activity.
Four factors of production
Land = all earths natural sources
Labour = employees and employers
Capital = equipment and factories
Enterprise = people who take risks using the other factors of production
Soul traders + -
+ easy to set up
+ own boss
+ you get all profit
- work long hours
- unlimited liability
- unincorporated (no legal identity)
Partnerships + -
+ more ideas
+ share the work load
+ more capital
- unlimited liability
- more disagreements
- profits shared
Private limited company (Ltd.) + -
+ limited liability
+ easy to get loan
+ incorporated
- more expensive to set up
- publish accounts every year
Public Limited company (PLC) + -
+ more capital raised
+ expand and diversify
+ limited liability
- easy to take over
- accounts have to be made public
- share profits
Business aims and objectives (7)
Survival
Profit maximisation
Growth
Increase shareholder value
Increase market share
Social and ethical consideration
Customer satisfaction achievement
Seven sections of a business plan
Personal details
Mission statement
Objectives
Product description
Production details
Staffing requirements
Finance
Five factors that influence location
Location of raw materials
Labour supplies
Competition
Cost
Location of the market
Internal expansion methods (3)
E-commerce = selling via internet
Opening new stores
Outsourcing = paying another firm to carry out its tasks
External expansion methods (4)
Joining with suppliers
Joining with competitors
Joining with unrelated firms
Taking over a customer
