Introduction To Business Flashcards
What is enterprise?
Another word for business.
What is an Entrepreneur?
Name given to a person starting a business.
What are the 4 factors of a business?
- Accounting and Finance
- Marketing
- Operations
- Human Resources
What is involved in Accounting and Finance?
- Keeps detailed records of all products made and sold, cost of goods sold and tax due
- responsible for ensuring costs under control.
- sufficient funds to pay day to day basis
- set budget to control business
- operate business payroll
What is involved in marketing?
- meeting the needs of the consumers: market research
- inform customers in manner that creates the desire to buy
- customer service
- TV ads
- lack of product knowledge can lead to customers losing interest and gain poor publicity.
What is involved in operations
-Design and control process of production
- maintenance on equipment, stock control, quality control and manage tech changes
- production and operations management
What is involved in Human Resources?
- responsible for the well being of employees (recruitment, training etc)
- time and money to department depending on the size of the business
- motivate workforce & ensure business complies with the employment legislation
What are the 4 factors of production?
- Land- natural resources
- Labour- effort humans contribute
- Capital- machinery, tools and buildings
- Entrepreneurship- combine land, labour and capital in new ways
What is a stakeholder?
An individual or a group of people who share an interest in the business
What is a constraint on a business?
It is a restraining factor that limits how a business operates
What are the 4 business sectors?
- Primary Sector
- Secondary Sector
- Tertiary Sector
- Quaternary Sector
What are the 2 sectors that businesses can be categorised into?
Private and Public
What is a private sector?
It is set up by individuals and is profit oriented
What is a public sector?
It is run by the local or central government and it provides a service.
It doesn’t aim to make a profit, however it still has to be cost effective.
What is a third sector organisation (TSO)?
They can be charities, community groups and social enterprises and they are there to achieve social goals
What is a sole trader?
They own the business and make all the decisions affecting it. They could employ a number of people but they are still in overall control.
What is the advantage of being a sole trader?
- full control
- simplicity: fewer legal formalities and is straightforward
- tax benefits: profits taxed at personal income
- privacy: fewer reporting requirements maintaining greater privacy about their finances
- direct relationship with customers: lead to better customer service and loyalty.
What are the disadvantages to being a sole trader?
- unlimited liability: personally responsible for all business debt, putting personal assets at risk
- limited capital: raising funds can be more challenging as options typically limited to personal savings and loans
- workload: burn out and lead to poor performance
- limited expertise: lack the diverse skill set needed to manage all aspects of the business effectively
- difficulty in expansion: growing bis can be hard due to resource constraints and limited access to capital
What is a partnership?
2 or more people that run the business together
What are the advantages to a partnership?
- easy to establish
- more partners mean more capital
- shared work for different skill sets
What are the disadvantages to a partnership?
- slower decision making
- losses and profits are shared
- legal restrictions on the maximum number of partners
Business lacks capital for expansion
What is a franchise?
The right given by one business to another to sell goods using its name
What are the advantages to a franchise?
- establish brand
- training and support
- reduced risk
- collective buying power
- market support
What are the disadvantages to a franchise?
- lack of control
- variable performance
- reputation can be at risk
- renewal and exit challenges, exiting a franchise is complex
