Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

A-Level Business > Intro to business > Flashcards

Intro to business Flashcards

1
Q

What is a sole trader?

A

A business owned and operated by one person, although they can employ staff

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Pros of being a sole trader?

A
  • The owner has complete control over the business
  • Big incentives to work hard (keep all the profits)
  • Few legal regulations when setting up the business
  • Owner chooses their own holidays and work hours
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Cons of being a sole trader?

A
  • No one to discuss business matters with
  • Business has unlimited liability
  • Hard to raise finance
  • Business is likely to remain small
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is a partnership?

A

A group or association of between 2 and 20 people who agree to own and run a business together

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Pros of a partnership?

A
  • The owners have complete control over the business
  • More capital is available to invest
  • Individual partners can offer specialisms
  • Continuity - partners can cover others absence
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Cons of a partnership?

A
  • Disagreement between partners
  • Business has unlimited liability
  • Number of partners is limited to 20
  • A partner could be unreliable or dishonest
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a Private limited company?

A

A company in which a number of shareholders (less than 50) contribute funds to the company in return for shares. Shares can’t be sold on the stock exchange.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Pros of a private limited company?

A
  • Business has limited liability
  • Easier to raise capital
  • Management is shared
  • More specialisation can occur
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Cons of being a private limited company?

A
  • Expensive to set up
  • Shares can’t be sold to the public
  • Less privacy as members of the public can see them
  • Accounts must be lodged with registrar of companies
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is limited liability?

A

Owners are only responsible for the amount of money invested

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What does LTD mean?

A

Private limited company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is a public limited company?

A

A company in which an unlimited number of shareholders contribute funds to the company in return for shares. Shares can be sold on the stock exchange.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Pros of being a public limited company?

A
  • Business has limited liability
  • Much easier to raise finance as shares can be sold on the stock exchange
  • The business will still exist if one of the shareholders dies
  • High degree of specialisation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Cons of being a public limited company?

A
  • The company is vulnerable to takeovers
  • Shareholders receive some of the profit in dividends
  • Annual accounts have to be published in full
  • May have communication and management problems due to size
  • Legal issues when forming or running a PLC
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is enterprise?

A

The process by which new businesses are formed in order to offer products and services in a market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is an entrepreneur?

A

A person who spots an opportunity and shows initiative and a willingness to take risks in order to benefit from the potential rewards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the 4 factors of production?

A
  • Land
  • Labour
  • Capital
  • Enterprise
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the difference between added value and profit?

A
  • Added value is the additional worth that is built into a product or service
  • Profit is the remaining money after all the costs associated with creating that value are paid off
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the primary sector?

A

Extraction of natural resources (e.g. oil, gas)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the secondary sector?

A

The sector where manufacturing takes place

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is the tertiary sector?

A

The sector where the goods/service are sold to the consumer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is the private sector?

A

Run by individuals and firms rather than the government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the public sector?

A

Usually compromised of organisations that are owned and operated by the government and exist to provide services for its citizens

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is the third sector?

A

The range of organisations that are neither public sector nor private sector. Includes voluntary and community organisations

25
Q

What is a local market?

A

A local market is the local community

26
Q

What is a national market?

A

A market much broader across a whole country or several regions

27
Q

What is an international/global market?

A

A marketplace where goods and services are exchanged across national borders

28
Q

What is a national business?

A

Operates within one country

29
Q

What is a multinational business?

A

Operates in a number of countries

30
Q

What are business functions?

A
  • Human resources
  • Customer service
  • Sales and marketing
  • Research and development
  • Administration and IT
  • Production/operations
  • Finance and accounts
31
Q

What is human resources?

A
  • Recruitment and retention
  • Dismissal
  • Redundancy
  • Motivation
  • Training staff
  • Health and safety / conditions at work
32
Q

What is customer service?

A
  • Monitoring distribution
  • After-sales service
  • Handling consumer enquiries
  • Offering advice to consumers
  • Dealing with customer complaints
  • Publicity and public relations
33
Q

What is sales and marketing?

A
  • Market research
  • Promotion strategies
  • Pricing strategies
  • Sales strategies
  • The sales team
34
Q

What is research and development?

A
  • New product development
  • Product improvements
  • Competitive advantage
  • Value added
  • Product testing
  • Cost savings
35
Q

What is administration and IT?

A
  • Managing property
  • Reception
  • Overview of quality control
  • Use of IT systems
36
Q

What is production / operations?

A
  • Acquiring resources
  • Monitoring costs
  • Production methods
  • Efficiency
37
Q

What is finance and accounts?

A
  • Cash flow
  • Preparing accounts
  • Raising finance
38
Q

Why do some businesses stay small?

A
  • Owners choice
  • Market size - local or niche
  • Access and availability of capital
  • Market domination
39
Q

What is a franchise?

A

A marketing arrangement allowing another business to trade in the same style as an existing business

40
Q

What is a franchisor?

A

The person or business who offers to franchise to other businesses its trading methods, products and business logos

41
Q

What is a franchisee?

A

A person or business buying the franchise

42
Q

How can you assess a franchise opportunity?

A
  • Location of the franchise
  • Successes of other franchises
  • What the business is / how it operates
  • Competition in same market sector
  • How financially secure the franchisor is
43
Q

Pros of a franchise for a franchisee?

A
  • Training provided by franchisor
  • Equipment often provided by franchisor
  • Brand name
  • Finding customers
44
Q

Cons of a franchise for a franchisee?

A
  • Initial investment is very high
  • Need permission from the franchisor to sell or close down
  • Franchisor can end the agreement and shut you down whenever they want to
  • Royalty fee
45
Q

Pros for a franchisor of a franchise?

A
  • Initial fee from franchisee
  • Royalty payments received
  • Growth of a business
  • Access to talent
46
Q

Cons for a franchisor of a franchise?

A
  • Reputation is at risk
  • A lack of control
  • Slow growth
47
Q

What is a cooperative business?

A

A member owned organisation that operates for the mutual benefit of its members. Ran and owned by its members, profits are shared

48
Q

Pros of cooperatives?

A
  • Easy to form
  • Limited liability
  • Low cost of operations
  • Income tax exemption
  • Internal financing
49
Q

Cons of cooperatives?

A
  • Lack of secrecy
  • Lack of interest
  • Corruption
  • Lack of mutual interest
50
Q

What are the 7 cooperative principles?

A
  • Voluntary and open membership
  • Democratic member control
  • Member economic participation
  • Autonomy and independence
  • Education, training and information
  • Cooperation among cooperatives
  • Concern for community
51
Q

What are the 5 types of cooperatives?

A
  • Consumer cooperatives
  • Worker cooperatives
  • Producer cooperatives
  • Purchasing or shared services cooperatives
  • Multi-stakeholder cooperatives
52
Q

What is the minimum number of members in a cooperative?

A
  • 10
  • No maximum
53
Q

What is a joint venture?

A

A joint venture is a separate business identity created by two or more parties, involving shared ownership, return and risks

54
Q

Pros of a joint venture?

A
  • Specialist skills from individual partners
  • Increased capital
  • Increased innovation and development
55
Q

Cons of a joint venture?

A
  • Profit is shared
  • Partners may have different goals
  • Shared control
  • Dependency on partners
56
Q

What is a strategic alliance?

A

An arrangement between two businesses to undertake a mutually beneficial project while each retains its independence

57
Q

Pros of a strategic alliance?

A
  • Can be flexible
  • Businesses do not need to merge capital and can remain independent
58
Q

Cons of a strategic alliance?

A
  • May be differences in how the two businesses are run
  • Must be trust between the two businesses
  • In a long-term strategic alliance one party may become dependent on the other

A-Level Business (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions