Chapter 2: Small Business Decision Making

Question 1

Demand

Answer 1

Demand is the quantity of a product that consumers are prepared to purchase.

Question 2

Market Research

Answer 2

is a process of systematically collective, recording and analysing information concerning a specific market.

Question 3

Market Conditions

Answer 3

are the features of a market into which a new product or service is to be introduced, and include factors such as the number of potential customers, level of competition and potential for growth.

Question 4

Innovation

Answer 4

is either creating a new product, service or process, or significantly improving an existing one.

Question 5

Research and development

Answer 5

is a set of activities undertaken to improve existing products, create new products and improve production.

Question 6

Entrepreneurship

Answer 6

Entrepreneurship as the ability and willingness to start, operate and assume the risk of a business venture in the hope of making a profit

Question 7

Business entity

Answer 7

is an organisation engaged in the production of goods and services.

Question 8

Incorporated business

Answer 8

A business that is incorporated has a separate legal entity from the owners.

Question 9

Sole trader

Answer 9

A sole trader business is a business owned and operated by one person.

Question 10

Unlimited liability

Answer 10

Unlimited liability means the business owner is personally responsible for all the debts of his or her business.

Question 11

Partnership

Answer 11

A partnership is an unincorporated legal business structure with a minimum of 2 and a maximum of 20 owners.

Question 12

Silent Partner

Answer 12

A silent or sleeping partner contributes financially to the business but takes no part in running of the partnership.

Question 13

Incorporation

Answer 13

is the process that businesses go through to become a registered company and a separate legal entity.

Question 14

Shareholder

Answer 14

Shareholders are the owners of the company.

Question 15

Limited liability

Answer 15

Limited liability means that the shareholders in a company cannot be help personally responsible for the debts of that business.

Question 16

Proprietary company

Answer 16

A proprietary company is an incorporated business with a minimum of 2 , and a maximum of 50 private shareholders.

Question 17

Cooperative

Answer 17

A cooperative is a democratic organisation owned and operated by people it serves, who join together for a common benefit.

Question 18

Trust

Answer 18

A trust is a business structure where a trustee (usually a business) holds property or carries out business on behalf of the members of the trust, known as beneficiaries.

Question 19

Goodwill

Answer 19

is the monetary value attached to the reputation of a particular business.

Question 20

Franchise

Answer 20

it means you buying the rights from another business to distribute its products under its name.

Question 21

Franchisee

Answer 21

A franchisee is an individual or organisation that purchases a franchise

Question 22

Franchisor

Answer 22

is an individual or organisation that grands a franchise.

Question 23

Zoning

Answer 23

Zoning is the means by which local councils allocate land by different uses, such as residential, commercial, recreational and industrial.

Question 24

Complementary businesses

Answer 24

they offer products and services that are related to a different business and that may be of use to the customers of that business.