Business in TRW (unit 1)

Question 1

What are aims and objectives definition?

Answer 1

They give a business direction and purpose for what a business does day to day

Question 2

Aim

Answer 2

Long term goal

Question 3

Objective

Answer 3

Short term goal to meet long term aim

Question 4

ways of judging success

Answer 4

Number of employees
Customer satisfaction
Market share
Social media followers
Profit *

Question 5

external factors of changing objectives

Answer 5

New government laws/legislation- new laws could impact on costs of a business

Changes in economy - during a recession (pandemic) a firm may prioritise survival

Changes in technology - a business may become more focused on e-commerce

Changes in environmental standards - customers want more environmentally friendly products

Question 6

What is a business plan?

Answer 6

states that what a business is trying to achieve over the next few years and now it intends to accomplish these aims

Question 7

Why may a business plan be created?

Answer 7

help set up a business successfully

coordinate actions

set out business objectives

raise finance - show plan to possible investors

Question 8

What are the main sections of a business plan (6)

Answer 8

background information on the founders and investors and their previous experience

an analysis of the market- the firms expected position within

the firms objectives

details of the price it will set and expected goals

how the business will compete against its rivals

analysis of the financial position of the business

Question 9

Drawbacks of business planning

Answer 9

lack of experience - people starting up their own business may not have the necessary skills to plan ahead effectively

change - a business plan cannot be made once and then used forever. Business plans need to be updated regularly

uncertainty - it is not always easy to look ahead and predict what is going to happen in the future

Question 10

Variable costs

Answer 10

costs that vary with output eg in a cafe, the more sandwiches that are produced, the more bread that will be used. The cost of bread is a variable cost

Question 11

Fixed costs

Answer 11

are costs that do change output e.g. the rent of a building will be set for a given period

Question 12

Total costs

Answer 12

are fixed costs plus variable costs

Question 13

Revenue

Answer 13

The income that affirm receives from selling its goods or services . “turnover”

eg if 200 units of a product are sold at £5 therefore would be ( 200 x £5 = 1000)