Component 1 Flashcards
How many employees in a micro enterprise?
0-9
How many employees in a small enterprise?
10-49
How many employees in a medium enterprise?
50-249
Name 3 features of a sole trader
- A sole trader is owned by just 1 person. 2. They have unlimited liability 3. A sole trader can employ people
Name 3 features of a partnership
- You can have 2-20 partners in a business. 2. Partners sign a legal agreement called a Deed of Partnership. 3. Partnerships have unlimited liability.
Name 3 features of a private limited company
- Shares are sold privately to friends and family. 2. Private limited companies have limited liability 3. Private limited companies have the letters ltd after the business name.
What is meant by limited liability?
The owners assets are separate from their private assets. This means that if the business goes bankrupt only business assets can be used to pay debts.
What is meant by unlimited liability?
The owners assets are not separate from their private assets. This means that if the business goes bankrupt business assets AND private assets can be used to pay debts.
What name is given to a business that has a physical store?
bricks and mortar
What name is given to a business that sells online?
Ecommerce
What is mcommerce?
A business that sells via mobile devices
What is the difference between a business and an enterprise?
Enterprises are businesses early in the growth phase
What do you call an enterprise that exists to do good in the community?
A social enterprise eg a village store run by volunteers
What is the name of a business run by someone alongside their main job or education?
Side hustle
What is an LLP?
A limited liability partnership where a partnership has registered legally to have limited liability.
Name the 3 business sectors?
Primary, secondary and tertiary
Give an example from each business sector
primary eg farming, secondary eg manufacturing, tertiary eg retail
What is the difference between B2B and B2C enterprises?
B2B stands for Business to Business meaning the business is selling its product or service to other businesses. B2C means Business to customer meaning the business is selling to individual customers.
What is an aim?
A target for the enterprise to achieve
Why have aims?
To provide a challenge
To provide a focus
To check your progress
Name 7 types of aim
Profit, Break even, survival
Environment, Ethics, Expand
Sell, Sell, Sell (maximise sales)
Give 2 examples of environmental aims
To use 100% renewable energy by 2025
To reduce waste by 50% this year
How could an ethical aim relate to people’s pay?
To pay people a fair wage
How might a company achieve an aim of expanding?
More sales, more stores, more customers or more products
What is meant by the term ‘an industry’?
A group of similar businesses based on the main product or service
What industry might a cafe operate in?
Food or hospitality industry
What industry might a cinema operate in?
The entertainment industry
What industry might a gym operate in?
The sport or fitness industry
Name the 4 reasons an entrepreneur might start their own business.
Be your own boss, flexibility, pursue an interest, pursue a social benefit
What name is given to someone who starts their own business, spelt correctly!
entrepreneur
Name 6 types of changes that might happen in a market
- Change in social trends eg social media
- Change in tastes
- Technological advances
- Economic changes
- Changes in society priorities eg environment
- Change in competition
What type of change can be seen in lots of people across the country finding they are doing low paid jobs
Economic changes
What type of change can be seen in 5G coverage accessible across most areas of the UK.
technological change
List 3 ways an enterprise could attract new customers
eg discount vouchers, BOGOF, loyalty cards, sales or competitions
Why does an entrepreneur need to manage its human resources well?
Human resources are staff. Staff should be motivated. Motivated staff give better customer service and also stay longer in the business.
Why does an entrepreneur need to manage its financial resources well?
Financial resources include cash to pay the bills and buy stock and profit to investment in growing the business (including advertising).
How does a business calculate profit?
Sales revenue - costs
What is market research?
Collecting and analysing data and information about customers and competitors
What is quantitative data?
Data in the form of numbers, providing simplified information without people’s opinions
What is qualitative data?
Data which is non-statistical, more in-depth information about people’s opinions and attitudes
What is primary market research?
Research gathered that is original and first-hand to find answers to the enterprise’s research questions
Give 3 examples of primary research methods
Focus Groups, surveys and questionnaires
What is an open question?
A question where the respondent can respond using their own format
What is a closed question?
A question where the respondent can only respond using a given format eg yes/no
What is secondary research?
research that has already been undertaken by another organisation and therefore already exists
Name 5 sources of secondary research?
Government reports, competitor materials, market reports, trade magazines, online data
Name a company that provides market reports
either Mintel or Mori
Give 2 advantages of secondary research
it is already collected so it is fast to access. It can provide quality information because it might be collected by experts
Give 2 disadvantages of secondary research
Information can be out-of-date. Market reports can be expensive to buy.
Define a niche market
specialist markets
where the product needs are adapted f
or small target customer group.
What term is used for the opposite of a niche market, where a single product meets all customer needs?
mass market
Give 5 examples of how to segment a market
Age, gender, income, location, lifestyle (AGILL)
What does USP stand for?
Unique Selling Point
What is product differentiation?
Features that allow the business to stand out from its competitors
Give 2 advantages of selling in a niche market?
Less competition, charge higher prices, customer loyalty
What is the difference between a patent and a copyright?
Patent offers legal protection for an idea or invention eg recipe. Copyright offers legal protection for an image or design eg branding
What is meant by the term ‘branding’?
The distinctive image, design and colour of the business eg the Coca-Cola brand
What do the letters PEST stand for?
Political, Economic, Social and Technological
What is situational analysis?
When a business examines the influences that affect its success using PEST
