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BUSINESS STUDIES (COMPONENT 1) > BUSINESS OPPORTUNITIES (Jauncey) > Flashcards

BUSINESS OPPORTUNITIES (Jauncey) Flashcards

1
Q

What are needs?

A

Physical needs for survival
-water, shelter, food, etc
Limited

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2
Q

What are wants?

A

Luxuries that make our lives more comfortable
-mobile phones, holidays, etc
Unlimited

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3
Q

What is the definition of an entrepreneur?

A

A person who has an idea for a business, develops the idea and organises necessary resources to see the idea through

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4
Q

What are the roles of entrepreneurs?

A
  1. Thinking and researching an idea
  2. Set up
  3. Running of business
  4. Expansion
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5
Q

What are motives of an entrepreneur?

A

> maximise profit- gain return on investment
job satisfaction- able to be their own boss
recognition- increase self-esteem from success
promote a particular cause (utopian)

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6
Q

What are characteristics of an entrepreneur?

A
  • opportunity spotter
  • hard working
  • self motivated
  • determined
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7
Q

What are skills of an entrepreneur?

A
  • communication skills
  • literacy
  • numeracy
  • team working
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8
Q

What are the importances of SMEs on the economy?

A
  • provide employment

- pay taxes

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9
Q

What is the definition of a stakeholder?

A

Anybody who is interested in the actions of a business

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10
Q

How can stakeholders be categorised as?

A

Internal or external
Primary or secondary
-P=directly related
-S=affected by actions but not directly

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11
Q

What is the definition of an enterprise?

A

A business whose purpose is to produce and sell goods and services.
Involves risk taking by an entrepreneur in order to gain a return on investments

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12
Q

What is the primary sector?

A

Extraction and use of natural resources and material from land and sea
includes:
-agriculture
-fishing

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13
Q

What is the secondary sector?

A

Raw materials turned into parts and components and finished products

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14
Q

What is the tertiary sector?

A

Where the business sells the final product to their consumer

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15
Q

How can you identify business opportunities?

A

Word of mouth

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16
Q

What are examples of stakeholders?

A
  • owners
  • customers
  • suppliers
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17
Q

What is a business plan?

A

A written document that describes a business. It covers objectives, strategies and sales

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18
Q

What are components of a business plan?

A

> financial forecast- break even, profit, etc
marketing strategy
the business and products or services

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19
Q

What are advantages of business plans?

A 
Attract investments (secure external findings)
Ensure firm develops healthy financial structure
Monitor progress
-Set targets (realistic=motivation)
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20
Q

What are disadvantages of business plans?

A

Market research costs time and money
Cannot plan for future (unpredictable)
Can provide false hope

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21
Q

What are sources of guidance and information to help make a business plan?

A
  • princes trust
  • high street banks
  • the government
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22
Q

What is the private sector?

A

Organisations can take numerous forms of business ownership
Usually exist to make a profit
Eg: Waitrose

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23
Q

What is the public sector?

A

Organisations owned and controlled by the government
Provide goods and services including street lighting, police and defence
Eg: NHS

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24
Q

In the public sector, what does the central government do?

A
  • provide services to the public, redistribute income from rich to poor (benefits through taxes) and pass laws
  • funded by income tax, VAT, corporation tax
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25
Q

In the public sector, what is the local government?

A

-solely responsible for certain are

Eg: refuge collection, flood defence, education, etc

26
Q

What is an aim?

A

What the business aims to achieve in the long term

27
Q

What is an objective?

A

A short term specific outcome which allows the business to achieve its aims

28
Q

What are aims and objectives of the private sector?

A
  • profit
  • expansion
  • survival
29
Q

What are aims and objectives of the public sector?

A
  • focussed more on needs than wants

- create a fair and just society

30
Q

What are features of public goods?

A

Feature 1- non excludability
-everyone can use them regardless of their wealth or circumstance
Feature 2- non rivalry
-ones persons use does not diminish anothers use

31
Q

What are public goods funded through?

A

Tax revenue

32
Q

What are merit goods

A

Provided by both public and private sector (although mainly public)
Funded through tax revenue
Eg: libraries, education and healthcare

33
Q

What is unlimited liability?

A

Liable for all debts, personal assets may be used to pay off the debt

34
Q

What is limited liability?

A

Business owners only liable for the amount they have invested into business

35
Q

What is an unincorporated business?

A

The owner has no legal identity

The business has unlimited liability

36
Q

Whats an incorporated business?

A

Legal difference between the business

Owner has limited liability

37
Q

What is a sole trader and what are factors of them?

A

Business owned and controlled by one person

  • can employ people
  • owner has decision making power
38
Q

What are aims and objectives of a sole trader?

A

Survival, profit and expansion

39
Q

As a sole trader, where does the profit go?

A

Reinvestment
Income tax paid on profit
Withdrawn as drawings

40
Q

What are benefits of being a sole trader?

A

Quicker decision making

Gain a profit

41
Q

What are drawbacks of being a sole trader?

A

Limited capital- rely on own savings
Limited range of skills
Success rate relies on one person

42
Q

What is a partnership?

A

Involves joint ownership of a business, usually between 2 and 20
Usually have unlimited liability but can have limited liability

43
Q

What are objectives of a partnership?

A

Survival, growth and profit

44
Q

What are benefits of being in a partnership?

A

Wider range of skills
Shared decision making
Less pressure=increased job satisfaction, key roles distributed

45
Q

What are drawbacks of being in a partnership?

A

Unlimited liability
Conflict- new partners can cause strains
Profit must be shared- smaller income

46
Q

What is a limited company?

A

Have limited liability as they become incorporated which involves separating the owner and business legally to form separate entities

47
Q

What is the incorporation process?

A

Register with registrar of companies

  1. Memorandum of association
    - outlines business details
    - purpose is to prevent fraud
  2. Articles of association
    - internal rules of company
48
Q

What is an LTD?

A

Shares cannot be bought or sold without agreement of director

49
Q

What are benefits of an LTD?

A

Limited liability

More control

50
Q

What are drawbacks of being an LTD?

A

Expansion is harder

Profit must be shared with shareholders

51
Q

What is a PLC?

A

When an LTD has a share capitol of more than £50,000 it can convert to a PLC
Shares can be floated on stock exchange

52
Q

What are benefits of being a PLC?

A

Limited liability

Expansion easier

53
Q

What are drawbacks of being a PLC?

A

Distance between customers

Easier to lose control as shares are sold to public

54
Q

What are reasons for turning from an LTD to a PLC?

A
  • banks more willing to lend (have £50,000)

- growth more likely

55
Q

What are reasons to turn from a PLC to an LTD?

A
  • reduce number of shareholders

- avoid risk of hostile takeover (51%)

56
Q

What are charities?

A

Reliant upon donations
Exist to promote their cause
Spread awareness
Usually rely on volunteers

57
Q

What are cooperatives?

A

Organisations owned by its members where a group of people have come together to work, buy, or sell goods and services

58
Q

What is a consumers cooperative?

A

Where a group of local consumers get together for mutual benefits. They buy, produce and sell it for a fair price

59
Q

What is a workers cooperative?

A 
Democratic organisations (everyone has their say)
^motivation
60
Q

What are advantages of cooperatives?

A

Increase motivation- all involved in decision making (work harder=better quality=better rep=more customers=more revenue=profit=everyone gets more

More ethically run=improve brand rep-word of mouth=increased awareness

61
Q

What are disadvantages of cooperatives?

A

Prefer internal recruitment (limit further growth)
-cant bring about new ideas

Workers may find it hard to find external promotion difficult as its a radical change (different way of working)

62
Q

What is a social enterprise?

A

A business with primarily social objectives whose surpluses are reinvested for that purpose rather than to make a profit for shareholders

BUSINESS STUDIES (COMPONENT 1) (7 decks)

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