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Business > Introduction To Business > Flashcards

Introduction To Business Flashcards

1
Q

Sole trader

A

Anyone who runs their own business

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2
Q

Unlimited liability

A

You are personally responsible for all the depts of the business

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3
Q

Partnership

A

Two or more people who run a business

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4
Q

3 advantages to partnership

A

Different skills
More time
Less hours

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5
Q

3 disadvantages to partnership

A

Let you down
Avoid jobs
Limited finances

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6
Q

Deed of partnership

A

Set of rules for running a partnership

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7
Q

Sleeping partnership

A

Someone who invests money but takes no part in the day to day running of the business

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8
Q

Company

A

Separate legal existence

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9
Q

Ltd

A

Private limited company

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10
Q

3 advantages to ltd

A

Limited liability
Shareholders invest
Shareholders become directors

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11
Q

3 disadvantages to ltd

A

Complicated to set up

Loss of individual control accounts must be made public

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12
Q

Plc

A

Public limited company

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13
Q

2advantages to plc

A

Raises lots of capital investment

Generates a lot of publicity

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14
Q

2 disadvantages to plc

A

Bad publicity can lead to drop in share price
Shareholders can revolt against ideas
High starting costs

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15
Q

Social enterprise

A

A business who seeks to help people and give back

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16
Q

Franchising

A

Paying a fee (royalty fee) to trade under another business

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17
Q

10 steps to franchising

A
  1. Apply
  2. Security check
  3. Interview
  4. Experience- shadow
  5. Meet franchise fam
  6. 2nd interview
  7. Panel interview
  8. 9 months training
  9. deal
  10. Hand over keys
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18
Q

2 advantages to franchising

A

Buy cheap stock

Offers you wouldn’t otherwise get e.g advertising

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19
Q

2 disadvantages of franchising

A

Long process

Expensive

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20
Q

Name the 3 sectors of the economy and what they do

A

Primary- raw material
Secondary- manufacturing
Tertiary-service

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21
Q

Examples of sectors of e economy

A

Diamond extraction-p
Diamond ring- s
Jewlers-t

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22
Q

Entrepreneurship

A

Owning your own business and haven’t excellent ideas

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23
Q

Why is a business plan important

A

Clear objectives–sales increase-profits–reinvest/-expand–increases sales–profits
See where your going wrong
Organised

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24
Q

What are the peters 5 forces

A
  1. Threat of new entrants
  2. Threat of subsidies
  3. Degree of rivalry
  4. Bargaining power of buyers
  5. bargaining power of suppliers
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25
Q

Opportunity costs

A

The best alternative given up

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26
Q

Business ethics

A

Doing what is morally right

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27
Q

Sustainability

A

Meeting today’s needs without taking away resources from the future

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28
Q

Bank of England

A

Responsible for making decisions in interest rates

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29
Q

Redundancy

A

When your job no longer exists

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30
Q

HSE

A

Health and safety executive-oversees all safety and law inspections

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31
Q

Negative externalities, example

A

A negative effect on a third party from a transaction
Smoking
Drunk behaviour

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32
Q

Break even

A

How many products I must sell before you cover all your costs

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33
Q

Why do you need to know your break even point?

A

Set targets
Minister success
Where your going wrong

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34
Q

Limitations to break even

A

Prediction

Can change

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35
Q

Break even formula

A 
BE= fixed cost/contribution 
Contribution= selling price-variable cost
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36
Q

Margin of safety

A

How many products you are above break even

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37
Q

Investment

A

Spending money whichbyou later benefits you

38
Q

Investment appraisal

A

How a business decides if an investment project is worthwhile

39
Q

Advantages of knowing payback

A

Simple to calcite

An early return is important even liquidyis more important than quality

40
Q

Disadvantages to knowing payback

A

Disregards cash flow

Discrimination against projects which involve a long payback period

41
Q

Formula for annual accounting rate of return (ARR)

A

ARR= average accounting profit divided by initial investment x100

42
Q

Budget

A

Allocating a set amount of money each month for various expenses

43
Q

Variance

A

Where there is a difference between planned budget and the actual outcome of the budget

44
Q

Advantages to knowing your budget

A

Simple to calculate

Allows decision making

45
Q

Disadvantages to knowing your budget

A

Disregards other factors

46
Q

Zero budgeting

A

Going to the boss and asking for more money

47
Q

Cash flow

A

Document monitoring money coming in and out

48
Q

Retained profit

A

Profits from previous year

49
Q

Advantages/disadvantages to retained profits

A

Don’t have to borrow–shareholders expect dividends

50
Q

Personnel savings

A

Using own savings to support business

51
Q

Advantages/disadvantages to personal savings

A

No interest charges–could lose all your money

52
Q

Sale/lease. Ack

A

Sell the physical building and lease it back

53
Q

Advantages/disadvantages to sale lease back

A

Raise money quickly–you may be evicted over time

54
Q

Factoring

A

Sell the debt to a debt collecting money

55
Q

Advantages/disadvantages to factoring

A

Doesn’t waste time–reflects badly on business

56
Q

Divestment

A

Close off/sell pet it the business

57
Q

Advantages/disadvantages to divestment

A

Reduces runnin costs–closes the stream of revenue

58
Q

Legend

A

Greggy Tizzle

59
Q

Reduction and current assists

A

Selling off stock

60
Q

Advantages/disadvantages reduction and current assets

A

Sell stock quickly–lose stock

61
Q

Loan

A

When you borrow money from the bank and pay it back over a certain period

62
Q

Issues shares

A

Business cretes new shares and sells them

63
Q

Grants

A

Given money do not have to pay back. It spent on stated reason

64
Q

Selling equity

A

Selling % of the business

65
Q

Venture capital

A

Investing in the business then receiving a high % or profits and over a few years the business will buy you out

66
Q

Trade credit

A

Paying for goods at a later stage

67
Q

Overdraft

A

Withdrawing money used for a small amount of time so you pay it back within a set amount

68
Q

Leasing

A

Paying someone for you to have the right to use it

69
Q

Hire purchase

A

Pay every month once instalment has finalised you completely own it

70
Q

Job production

A

Satisfying the customer
Small business
Flowers for a wedding

71
Q

Batch production

A

Set procedure and stages

One process before the next

72
Q

Flow production

A

Products move along the line

Car manufacturer

73
Q

Cell production

A

Teamwork to ensure the product is put together

74
Q

P.S contribution

A

Variable costs

75
Q

P.S market skimming

A

High prices then dropping it

76
Q

P.S premium

A

High prices

77
Q

P.S loss leader

A

Low prices so good value

78
Q

P.S phycological

A

In their head e.g food

79
Q

P.S competitor

A

Getting the best prices e.g cafe

80
Q

P.S predatory

A

Push out competitors

81
Q

P.S cost plus

A

Add on cost for profit e.g clothes

82
Q

P.S Penetration

A

Stealing customers

83
Q

Product mix

A

The overall range if products a business produces and sells

84
Q

Product life Cycle

A

The life of a product from its introduction through to its potential decline

85
Q

Promotion

A

Making customers aware of the brand

86
Q

Above the line

A

Where you don’t contact the customer

87
Q

Below the line

A

Where you come into direct contact with the customer

88
Q

Why choose the radio to promote stuff?

A

Most people drive
Played a lot
Customers trust the radio–same time everyday

89
Q

Wholesaler

A

Person or company that sells goods in large quantities at low prices e.g drink waters

90
Q

What can you get diseconomies of scale

A

Poor communication
Conflict
Buying too much stock

91
Q

Name he 4 stages of a product life cycle

A

Intro,growth, maturity, decline

Business (5 decks)

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