end of unit understanding business test Flashcards
what is the four factors of production
land,labour,captial and enterprise
what is land
this is the natural resources used in a company e.g wheat
what is labour
labour is the people that work for a company e.g a teacher
what is capital
capital is the man made resources e.g a chair
what is enterprise
enterprise is the entrapuner that runs the company e.g rihanna
what is a good
a good is a tangablie item e.g a phone
what is a service
a serviuse is a non-tangible item and something you pay for e.g hairdressers
what is non durable item
something that can only be used once e.g paper cup
what is a durable item
a good that you can use multiple times e.g trainers
what are the sectors of industry
primary, secondary, tertiary
what is primary
it is when materials are extracted from the earth. e.g mining
what is secondary
this is where the materials are manufactured into goods e.g a bulider
what is tertairy
this is where you selll the goods or services e.g tescos
what are the sectors of industry
public,private and third
what is private sector
soletrader, partenersips and private limited company (ltd)
what is the public sector
public limated company (plc)
third sector
charaties, social enterprises, volentering
who owns , controls and funds soletraders
the soletrader
who owns , controls and funds partenerships
the partners
who owns , controls and funds private limated company (ltd)
invited shareholders , board of directors , selling shares
who owns , controls and funds public limated company
goverment lected by civil dervants elected by government , taxes
what is a social enterprise
it is a business with a social objective but reinvests the profit they make into a cause.
whats one thing you should have in a business plan
a mission statment
an example of a social enterprise
social bite , the big issue
how do social enerprise get money
donations fundrasing
who looks at a business plan
bank , investors , goverment and the entupeuer
what is the first p in ppigss
profit
what is the second p in ppigss
provide a quality service
what is the i in ppigss
increase market share
what is the g in ppigss
growth
What is the first s in ppigss
social responsibility
What is the last s inppigss
survival
external factors in a business
political
economical
social
technological
environmental
competitive
examples on how political effects a business
minimal national wadge changes meaning costs of staff go up
examples on how economical effects a business
intrests rates go up meaning that they have to increase prices due to paying more intrest rate loans
examples on how social effects a business
fashion changes meaning if your products are in trend you will get more sales meaning more profit
examples on how technolgical effects a business
if you dont have a tiktok account this means that you could be misssing out on new coustumers
examples on how enviromental effects a business
when chnages in the weather can affect your business this means there might be a delay with delivery
examples on how competitive effects a business
a business might do a promotion on a similar product meaning profit goes down
what are the internal factors in a business
financial
human resources (employes and managment)
current technology
how can employes affect a business
them having poor service and preforming badly
how can managers affect a business
inexperienced managers meaning bad decisons
how can finance affect a business
if they don’t have available finance they won’t be able to buy a lot of things for their business
how can current technology affect a business
if they dont have social media they wont be able to promote the business.
what skills would an enterpuner need
- risk taking
- determination
- leadership
- decision- making
- hard working
advantages of being a sole trader
- Owner keeps all the profits
- Easy to set up: little legal requirements
- The owner gets to make all the decisions
disadvantages of being a sole trader
- The owner has unlimited liability
- The business has to close if the owner is ill/on holiday
- Hard to obtain finance
- Large workload as nobody to share decisions with
how many partners can there be in a partnership
2-20
advantages of a partnership
- Partners can share the workload.
- Easier to obtain finance through partners
- Simpler to cover holidays and illness.
- Risks are shared.
what is a sole trader
a business owned by 1 person e.g a hairdressers
disadvantages of a partnership
- Profits are shared amongst partners.
- Chance of arguments or disagreements.
- Cost of drawing up a Partnership Agreement
- Partners have unlimited liability.
what is unlimited liablity
the owner is responsible for all business debts
advantages of private limited company (LTD)
- Owners maintain control of their business as they choose who to sell shares to - often supportive family members
- Easy to raise finance selling shares
- Shareholders have limited liability
disadvantages of private limited company (LTD)
- Dividends must be given to shareholders
- The legal set up costs are expensive. Limited companies must use documents called Memorandum of Association and Articles of Association.
- Shares cannot be sold publicly
who owns a social enterprise
social entrepreneurs
examples of social enterprises
big issue
who owns controls and finances a charity
trustees , a bored of trustees ,Donations, government grants, fundraising
what is a charities objective
To help a social cause, to increase donations, survival
example of a charity
british heart foundation
external stakeholders
- banks
- customers
- suppliers
- local community
- pressure groups
- local government
- national government
internal stakeholders
- owners
- shareholders
- employees
owners/shareholders interest
- make a profit
- receive high dividends
owners/shareholders influence
- Make all the big decisions
- investing or withdrawing equity into the business
- change management
managers interest
- get promoted
- win bonuses
- have job security
managers influence
- hiring and firing
- creating company policies
- making day-to-day decisions and long term decisions
employees interest
- job security
- higher pay
- improved working conditions
employees influence
- increasing or decreasing productivity
- providing good or bad customer service
- in extreme cases, withdrawing their labour and going on strike
customers interest
- quality products and services
- low prices
- value for money
customers influence
- deciding whether or not to purchase the product or use the service
- affecting an organisation’s reputation by word of mouth, reviews and social media
banks interest
- the organisation can pay their loans in full and on time
banks influence
- permitting or denying loan requests
- changing interest rates on loans offered
- changing repayment lengths
governments interest
- Want businesses to pay corporation tax
- create jobs and wealth for the population
- provide goods and services for the population
government influence
- raising or lowering corporation tax
- introducing or repealing laws that affect businesses
- offering grants to attract firms to locate to depressed areas
suppliers interest
- regular orders from their customers (the other businesses)
- prompt payment
suppliers influence
- raising or lowering prices of goods
- changing credit terms
- changing delivery times
- increasing or decreasing the quality of their goods/materials
local community interest
- firms to bring jobs to the area
- good, safe environment to live in
- good transport and communication links
local community influence
- protesting and petitioning if unhappy at an organisation’s conduct
- Boycotting the organisation
benefits of good customer service
- Enhances the organisation’s reputation
- Good publicity from happy customers – bad experience will be spread through word of mouth
- Regular repeat orders – loyal customers
- Loyal customers means more sales and a bigger market share
- Attract a better calibre of staff
impact of bad customer service
- Dissatisfied customers
- Loss of customers
- Bad publicity
- Demotivated staff
- High staff turnover
- Increased costs
- Bad reputation
how to achieve good customer service
- Offering advice about products and their uses
- Investigating late or missing orders
- Assisting when errors have been made to orders/deliveries
- Managing refunds or replacement orders
- Dealing with general enquiries and complaints
- Being polite and friendly to customers
