Introduction To Business Flashcards
What are the sectors of industry?
- primary
- secondary
- tertiary
What is the primary sector?
An industry involved in the extraction and collection of natural recourses such as agriculture and fishing
What is the secondary sector?
Also Known as the manufacturing/ production sector. This is where the raw materials are turned into goods
What is the tertiary sector?
The service sector. This sector is the sale sector, meaning it is the sector in which the final product is sold to customers
Current changes in the primary sector
- less raw materials
- mines closed
- machines replacing people
Changes to the secondary sector(2)
- foreign competition
- machines replacing people
Charges to the tertiary sector (3)
- grown
- more shops required
- people have more free time so they go to shops more
What are the sectors of economy?
- private
- public
- third
Private sector organisations (4)
- sole trader
- partnership
- franchise
- private limited company
What are the advantages of a sole trader ? (4)
- full control
- keep all profit
- private data
- more personalised service
Disadvantages of a sole trader (4)
- unlimited liability
- hard to raise funds
- have to make all the decisions
- can’t afford to bulk buy
What are the advantages of a partnership?(2)
- more ideas
- more people to raise funds
What are the disadvantages of a partnership (3)
- disagreements
- split profit
- unlimited liability
What are the advantages of a franchise? (3)
- already trusted
- instant brand recognition
- training provided
What are the disadvantages of a franchise?(2)
- can’t use own ideas
- if any franchise gets a bad reputation it affects all
What are the advantages of a private limited company?(2)
- shareholders have limited liability
- control of company not list to others as only friends and families can buy shares
What are the public sector organisations?
- central government organisations
- local government organisations
What is a central gov thevNHS ernment organisation?(2)
- west minister parliament and the Scottish parliament provide us with things like the NHS
- has to make good use of taxpayer money
What is a local government organisation (3)
- councils set up by central government
- run by locally elected councillors
- provide us with things such as education, housing and street lighting
What are the third sector organisations?
- social enterprises
- charities
What is a social enterprise?
- aims to help improve quality of life in communities and help social/ environmental causes
- profit re invested
- offers good or service
What is a charity (3)
- exempt from paying tax
- aims to raise money for a cause rather than make a profit
- government regulates activity and keeps a register
What are the factors of production?
- land
- labour
- capital
- enterprise
What is land ( factor of production )
The natural resources that a business uses, such as water and land itself
What is labour ( factor of production )
This refers to the Human Resources required, including people who work for the business
What is capital ( factor of production )
The resources owned by a business such as machines, tools and factories
What is enterprise ( factor of production)
A business can only be successful if the owner is willing to take an enterprising roe ( be initiative and take risks ) the enterprise is the idea
What is an entrepreneur?
An individual who develops a business idea by combining the factors of production to produce goods and services that will satisfy our needs and wants
Give examples of skills (6)
- languages
- problem solving
- understand software
- knowledgeable
- effective communicating
- well presented
Qualities (6)
- patient
- friendly
- outgoing
- motivated
- calm
- firm
What is a stake holder?
A stakeholder is a person or a group who have an interest or influence on a business and how it is managed or run
What are the internal stakeholders (4)
- employees
- management
- owner
- shareholders
What are the external stake holders?
- pressure groups
- government
- banks
- suppliers
- local community
- customers
What is the interest and influence the owners of a business have?(2)
Interest - maximise profit and make sure the business survives
Influence- the owner of a business can change company policies and make changes to the good/ service
Customers interest and influence (2)
Influence - receive a good quality product or service at a low price, they also want the business to satisfy their needs & wants
Interest - they can choose to give the business a good reputation and they can choose to shop elsewhere
Employees interest and influence (2)
Interest- receive good pay sand have a positive work environment
Influence - an employee could choose to work hard boosting sales and give good customer care
Local community interest and influence (2)
Interest- for a business to attract tourists and provide goods and services, they also want the business to provide jobs
Influence- the local community could protest against the business and potentially have it closed down
What’s a banks interest and influence(2)
Interest - for businesses to take out loans and pay the banks interest for that money
Influence - the bank could refuse to give the business loans
Interest and influence of the government (2)
Interest- to get tax money to fund public sector businesses and to provide jobs
Influence- the government can alter taxes
Interest and influence of pressure groups (2)
Interest - businesses to be environmentally friendly
Influence - can put pressure on a business to support a cause or stop doing something
What are the internal factors of a business? (3)
- finance
- human recourses
- technology
How does the Finance available effect the business
if the business has more money it can afford better quality raw materials
How does technology available effect a business
If a business has an up to date and easy to use website, this can increase sales and profitability
How do human recourses effect a business
If a business has friendly and skilled employees, this will increase customer satisfaction
What are the external factors ( pestec )
P- political E- economic S- social T- technological E- environmental C- competition
What is a political factor that impacts businesses
If the government raise the minimum wage, this will cost the business more money as they will have to pay employees more
What is an economic factor that effects businesses
If exchange rates are low compared to another country, it costs a business more to trade with another country
What is a social factor that effects the business
If customers attitudes and desires change , the business will need to alter their good/ service
What is a technological factor that effects a business
If a business has an up to date and easy to use website, people will be able to purchase current items
What is an environmental factor that could effect the business?
If the weather is really bad,the roads will be closed so the deliveries will not reach your customers
A competitive factor that can effect businesses
If your competition lowers their prices you will either have to lower yours or lose sales and customers
What is a sole trader?
This is a business owned and controlled by one person
What are advantages of being a sole trader?(3)
- make all decisions
- keep all profits
- take holidays whenever
Disadvantages of being a sole trader (3)
- unlimited liability
- have to raise money yourself
- hard to set up
What is a partnership?
This is a business owned by two or more people
What are the advantages of a partnership?
- easy to set up
- don’t have to pay income tax
- split investment
