Business In The Real World Flashcards
What is one common meaning of the term ‘enterprise’?
An enterprise is simply another name for a business.
What is the more significant meaning of ‘enterprise’?
Enterprise describes the actions of someone who takes a risk by setting up, investing in and running a business.
What is an entrepreneur?
Someone who takes a calculated risk through starting a business.
What is a business?
An organisation that exists to produce goods or supply services to customers.
What is opportunity cost?
The cost of what has been given up, sacrificed or forfeited when another option has been chosen.
What is a not-for-profit organisation?
An organisation set up to provide a good or service to help others.
What happens to surplus money made by not-for-profit organisations?
Surplus money is used to meet the social aims and objectives of the organisation.
What are the three main sectors of business?
Primary, Secondary, Tertiary
What does the primary sector focus on?
Producing raw materials which are extracted from nature
Examples include farming, mining, oil exploration, and fishing.
What is the main activity of the secondary sector?
Manufacturing goods which are made from raw materials and turned into finished goods
This sector also includes firms involved in construction.
What does the tertiary sector provide?
Providing services
This sector includes businesses involved in the distribution process.
Name two types of businesses in the tertiary sector.
- Shops
- Transport
Additional examples include hairdressing, banking, and entertainment.
What are the four factors of production
Land, labour, capital, enterprise
What is a sole trader?
An individual who has sole ownership of a business
What is a partnership?
A business started and owned by more than one person.
What is a Partnership Agreement?
A legal document that sets out how the partnership is run and how profits are divided.
List two benefits of partnerships.
- Minimal paperwork once Partnership Agreement is set up
- Partners can provide specialist knowledge and skills
What is one drawback of partnerships?
Unlimited liability.
List three drawbacks of partnerships.
- Partners have to live with decisions of others
- Decision-making can take longer
- Harder to raise finance than a company
What does unlimited liability mean?
Owners may have to use their personal funds to pay for debts, possibly through the sale of their homes or other assets.
