Introduction to Business Management Flashcards
Reason for starting up a business (7)
- earning
- growth
- transference and inheritance
- challenge
- autonomy
- security
- hobbies
Factors to consider when starting a business (7)
- business idea
- finance
- marketing
- human resource
- fixed assets
- enterprise
- customers
Problem with new businesses (8)
- cash flow problem
- lack of finance
- people management problem
- marketing problem
- production problem
- high production cost
- unestablished customer base
- poor locatoin
Define Cost and Sales revenue (2)
Cost: product expenditures
Sales revenue: money earned from selling its product
Define sole trader (1)
self employer person who runs and control the business and is the sole person held responsible for profit and limited liability
Advantage of sole trader (5)
- few legal formalities
- profit taking
- being your own boss
- personalized service
- privacy
Disadvantage of sole trader (6)
- high risk
- limited source of finance
- limited economies of scale
- workload and stress
- lack of continuity
- unlimited liability
Define partnership (1)
type of private sector business made up of 2-20 people
Advantage of partnership (4)
- financial strength
- financial privacy
- specialization and division of labor
- cost effective
Disadvantage of partnership (4)
- lack of continuity
- lack of harmony
- prolong decision making
- unlimited liability
Define companies (1)
business that is owned by shareholders
Define limited liability (1)
restriction on the amount of money an owner can lose if its business goes bankrupt
Define unlimited liability (1)
legally liable for all monies owned to its creditors
Define private limited liability (1)
business that is owned by shareholders with limited liability but whose share cannot be bought by or sold to the general public
Define public limited liability (1)
the general public can buy or sell share in the company
