Business topic 1 - business activity Flashcards
Define the term ‘
Entrepreneur’ and state 3
characteristics of an
entrepreneur
Entrepreneur - Risk-taker who sets up a business in return for financial gain.
Characteristics - Determined, risk taker and confident
List the factors that affect a
businesses location and the
factors that affect the choice
of site?
Accessibility.
Security.
Competition.
Business Rates.
Skill base in the area.
Potential for growth.
Define the term Stakeholder
And give 5 examples
Stakeholder - Any person, group of people or other organisation that has an interest in the activities of a business.
Examples - investors, employees, customers, suppliers, communities, governments, or trade associations.
What are two disadvantages
of using a Sole Trader as a
form of ownership?
Unlimited liability
Sole/More responsibility
What are the 3 Sectors of
Industry?
primary.
secondary.
tertiary.
What is meant by the term
economy of scale?
The cost advantages that a business can exploit by expanding their scale of production.
Explain the difference
between Consumer Goods
and Producer Goods.
Give an example for each.
Consumer goods are products that are purchased for personal use. Producer goods are those that are used by a company to produce more of its own goods.
Examples-
Producer goods - machinery and tools
Consumer goods - food, beverages, clothing, shoes, and gasoline.
What does unlimited liability mean?
A business owner is personally liable for all the debts of the business. If the business fails, the sole proprietor’s personal property can be seized to pay off debts.
What is the difference
between a Plc and an Ltd?
Plc- A public limited company (‘PLC’) is a company that is able to offer its shares to the public.
Ltd - A company which does not offer stock to the public, and thus its shareholders are normally family, friends and employees
Explain the term ‘Franchise’, referring to Franchisee and Franchisor
A franchise is a joint venture between a franchisor and a franchisee.
What two documents do you need to form a Company (Ltd/Plc)?
Limited companies must use documents called Memorandum of Association and Articles of Association.
What is the difference between an aim and an objective.
Aim - The overall target or goal of the business
Objective - The steps a business needs to take to meet its overall aims
Define the term ‘Cooperative’
A business or organisation that’s owned and controlled by its members, to meet their shared needs
Explain the difference between a Sole Trader and a Social Enterprise?
Sole trader - A business that is owned and run by one person.
Social enterprise - Businesses that put the interests of people and planet ahead of shareholder gain
What is one benefit of being a Ltd rather than a partnership
Can keep all the profits.
