deck_3621856 Flashcards
How do stakeholders influence a business? How are they important? What are their wants?
Employees- job security, good salary, good working conditions.Suppliers- need business to do well so they order more supplies = profitLocal community- Noise & pollution, job opportunities.Customers- high quality products at a low price.The government- recieve taxes if business does well.
How can objectives be used to measure success of a business?
By comparing actual performance to objectives they’ve set. If targets are easily met, harder ones could be set.
What are business objectives?
Clear targets for the business to work towards. More specific than aims. E.g. if the aim is ‘growth’ : Increase sales by 30% over 2 years. E.g. if the aim is ‘environment’ : Increase usage of recycled materials.
What are the disadvantages of operating as a franchisee?
Can’t create own products, only sell existing ones. Have to run the business by the franchisor’s rules, freedom and creativity is limited.
What is a market niche/niche market?
A small part of the overall market, made up of customers with a particular need. Big companies don’t usually invest in these ideas, so great opportunity for a small business.
What is a gap in the market?
When customers have a need that isn’t being met. Businesses should quickly fill the gap before competition does.
Why might someone choose to set up a business? 3 main reasons?
Financial- to make lots of money from profitPersonal- no other job opportunities, desire to see own product being sold.To help others- a charity
What is the purpose of a business plan? How does it help, and raise funds?
It is an outline of what a new business will do, and how it aims to do it. It can be used to convince a bank to loan start up capital. Money isn’t wasted as problems are recognised early on with a business plan.
What are the 4 main types of business aims?
- Making profit in order to survive.2. Might focus on expanding business as much or as quickly as possible.3. Satisfying the customer.4. Not damaging the environment.
What are the advantages of operating as a franchisee, rather than an independent business?
Products are already established, so less risk of business failing. More likely to get a bank loand to help start up.
What is a new business’s aims and objectives?
To break even. To make a profit.
What does unlimited liability mean?
This means that if the business goes into receivership, the business owner has to cover the costs themselves, even if this means selling everything they own.
What does limited liability mean?
You can’t lose any more money than what you invest in the business.
What are the risks faced by businesses? What can be done to minimise risks?
Health of the economy- for example there could be unknown unpredicted recessions. Competition, businesses should monitor its plan and factors that affect success using research.
What are the 7 main factors that influence location of a business?
- Avaliability of raw materials2. Transport3. Labour4. Competition5. Technology6. Location of consumers7. Costs
