Business in the real world + influences on business Flashcards
1
Q
Entrepeneurs objectives
A
- financial reasons
- business when they identify a gap in the market
- some people want more independance
- follow an interest
- dissastisfied with their current job
- a new challenge
- want to benefit others
2
Q
entrepeneurs need particular objectives
A
- hardworking and determined
- organised
- ## innovative and creative
3
Q
sectors of economy
A
- primary- produces raw materials
- secondary- manufactures goods
- tertiary-provides services
4
Q
four factors of production
A
1 land
2 labour
3 capital
4 enterprise
5
Q
sole traders-advantages
A
- easy to set up
- be your own boss
- decide what happens to the profit yourself
6
Q
sole trader-disadvantages
A
- long hours
- unlimited liabilty- you are liable if the business is liable
- unincorporated- doesnt have its own legal identity
-hard to raise money
7
Q
partnerships-advantages
A
- more owners= more ideas and greater range of skills and expertise
- share work
- more capital to grow
8
Q
partnerships-disadvantages
A
- legally responsible for all partners
- unlimited liability
- more owners more disagreements
- profits are shared between partners
9
Q
limited companies have..
A
- are incorporated
- limited liability
- owned by shareholders
10
Q
privite limited company-advantages-
A
- limited liability
- continue trading after a shareholder dies
- ## easier to get a mortgage or a loan
11
Q
privite limited company-disadvantages-
A
-more expensive
- legally obliged to publish its accounts
12
Q
public limited company-advantage
A
- much more capital can be raised
- expand and diversify
- ## have limited liability
13
Q
privite limited company-disadvantages-
A
- difficult to agree on decisions
- ## easy to buy enough shares to take over the company
14
Q
not for profit-
A
- dont try and make a profit
- generate money to cover costs
- hard to manage
15
Q
franchising meaning
A
- start up a business as a franchise of another company
16
Q
franchising-advantages
A
- recognise brand name
- less risky than starting your own business
- provided with training
17
Q
franchising-disadvantages
A
- might have struct rules
- usually has to pay alot of money to start
18
Q
finanicial aims meausred in money
A
- survival
- growth
- maximise profit increase
- shareholder valuer
19
Q
non financial aims
A
- social and ethical
- achieving customer satisfaction
- personal reasons
20
Q
aims and objectives can change in different ways
A
- enter new markets
- size of work force
21
Q
revenue
A
= sales * price
22
Q
profit
A
= revenue- costs
23
Q
gross profit
A
= revenue-costs of sales
24
Q
net profit
A
= gross profit - ( operating expenses + interest)
25
business plan
- business idea
- business aims and objectives
- target market
- marketing mix
- location
- finance
-
26
purchasing econoomies of scale
- buys its supplies in bulk gets them at a cheaper init price
27
technicsl economies of scale
large firm can afford to buy and operate more advanced machines
28
internal expansion
- targeting new markets
- developing new products
- opening new stores
- outsourcing
29
contract of employment
- job title
- starting date
- hours of work
- where they will be working
30
laws about recruitment
- must not discriminate against religion,gender,race,age,sexual orientation
- equality act 2010 all employees should be paid the same
31
workplace needs to be safe
- health and safety at work act of 1974- requires all employees and their employees to take responsibility for health and safety
32
customer rights act 2015
- product should be fir for purpose
- match the description
- should be satisfactory quality
33
consumer laws can affect businesses
- forced with costs and consequences
- end in court if the customer is unhappy
34
e-commerce
buying and selling online
35
communication online
- websites
- email
- mobile apps
- live chats
- video calls
- social media
36
acting ethically can have benefits and drawbacks
- ethical policies can be expensive- higher labour costs
- ethically sourced materials more difficult to find a supplier and have to pay a higher price
- increased costs mean the business doesnt nescassarily make as much profit
37
reducing the impact on the environment
- reduce amount of packaging recycle delivery boxes and unwanted goods
- dispose of harmful waste carefully
- invest in efficient machinery to reduce air pollution
38
mor sustainable
-resource depletion
- climate change
39
pros and cons of being environmentally friendly
- increase customers -'green image' which increases sales
- trade off between being sustainable and making a profit
40
inflation
increase in the price of goods and services
41
effects of inflation
- customer spending
- cost of labour
- global competition
42
low interest rates
- cheaper to borrow money
- less interest when saving money at a bank
- more money to spend so demand for goods and services goes up
43
higher interest rates
- borrowing money is going to be expensive
- less money available to spend - paying higher rates
- reduces demand = profits can decrease
44
competitors can affect business decisions
- price
- customer service
- quality
- product range
- location
45
less competition when
- a product is new
- market is small
- difficult to enter a new market
46
globalisation
- how everything is interconnected
47
how gloabilisation affects the way businesses operate
- imports have a larger market to buy from able to buy supplies more cheaply , reduces costs and increase profits
- exports means larger markets to sell to
- business location- has made it easier to locate parts of their business abroad
- multinationals
48
