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Business > Investigating a small business- paper 1 > Flashcards

Investigating a small business- paper 1 Flashcards

1
Q

What’s the difference between e-commerce and m-commerce?

A

E- commerce is using the internet whereas m-commerce is using mobile technology

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2
Q

What is the definition for a marketplace?

A

Where buyers and sellers meet

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3
Q

What is a dynamic business?

A

Businesses responding to what customers want

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4
Q

What is the definition for enterprise?

A

The skills shown by an entrepreneur

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5
Q

What are the 3 roles of an entrepreneur?

A

Organising resources, take risks, make decisions

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6
Q

What’s the difference between a stakeholder and a shareholder?

A

A shareholder owns a ‘share’ in a business whereas a stakeholder has an interest in the business

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7
Q

What is a pressure group?

A

A group with a common interest/goal who work collectively to further the cause

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8
Q

What’s the difference between imports and exports?

A

Imports are bought into one country from another whereas exports are produced in the home market but sell in a foreign market

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9
Q

What is meant by the economic climate?

A

The broad performance of the UK economy, as measured by GDP growth

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10
Q

What is meant by consumer income?

A

The amount a person or household has to spend after paying tax

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11
Q

What is meant by unlimited liability?

A

Where a business and its owners are one and are responsible for all business debts

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12
Q

What are the features of a private limited company?

A

Incorporated business that can sell shares to family and friends and the shareholders have limited liability

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13
Q

Do partnerships and sole traders have unlimited or limited liability?

A

They both have unlimited liability

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14
Q

What is the meaning for limited liability?

A

Where a business and its owners have separate legal identities, meaning shareholders can only lose original amount they invested into a business

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15
Q

What’s the difference between a franchisee and a franchisor?

A

A franchisee is the business that buys the rights to a franchise whereas a franchisor is the person who owns the rights to the franchise

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16
Q

What is meant by venture capital?

A

Where an experienced business person provides funds for a smaller company that may be too risky for other investors in return for equity

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17
Q

What is meant by equity?

A

The money returned to company investors once the debts are paid off and the assets are liquidated

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18
Q

What is variable and fixed costs and what are examples of both?

A

Variable rises as output rises e.g raw materials and packaging
Fixed stay the same as output rises e.g rent, salaries and insurance

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19
Q

What is meant by trade credit?

A

Period of time given to a customer between receiving the goods and payment being due

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20
Q

What is meant by demographics?

A

The characteristics of the population in terms of age and gender

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21
Q

What is a focus group?

A

Where a number of customers are invited to attend a discussion about a product

22
Q

What is market mapping?

A

A method of evaluating business ideas by setting out the features of a market and plotting current products that are being provided which spots gaps in the market

23
Q

What is income tax?

A

Charge on income such as wages

24
Q

What is corporation tax?

A

The charge on a company’s profits

25
Q

What are national insurance contributions?

A

Charged to cover healthcare, state pensions and employment related benefits which both employers and employees pay

26
Q

What is value added tax

A

Charge on the sales of goods and services based on the value of the item sold

27
Q

What is council tax?

A

Charge on property by local councils based on the property’s value and number of people in a household

28
Q

What is meant by breakeven?

A

Number of products a business must sell so that it’s total revenue is the same as its total costs

29
Q

What are examples of cash outflows?

A

Wages, suppliers, loan repayments and advertising

30
Q

What is insolvency?

A

When a business can no longer afford to pay its debts

31
Q

What is meant by the margin of safety?

A

Amount of products a firm sells over and above the break even point

32
Q

What is meant by overdraft?

A

Taking more out of your account then you actually have with agreement from your babk

33
Q

How do new business ideas come about?

A

Adapting an existing idea and creating an new idea

34
Q

Why do new business ideas come about?

A

Changes in technology, products becoming obsolete and change in consumer wants

35
Q

What will happen if the economic climate is bad?

A

Consumers will spend less because they will either not be working or fearful of losing their jobs

36
Q

What is the employment law and when was it introduced?

A

Provides rights for employees to be protected in the workplace e.g minimum wage and equality act
Was introduced in 1963

37
Q

What is the consumer law and when was it introduced?

A

It protects consumers as they have the right to return faulty goods and the products must be as described and of good quality
Was introduced in 2015

38
Q

What are the 3 ways that technology influences businesses?

A

Costs- improves efficiency and reduces costs
Sales- can sell through e-commerce and reach larger audience
Marketing mix- promotion

39
Q

What are the 8 stakeholders?

A

Owners, employees, customers, managers, suppliers, pressure groups, local community, government

40
Q

What does a business plan contain and what is it used to convince?

A

Forecasts of sales, costs, cash flow and market research, this is used to convince a bank to give a loan and reduce risk

41
Q

What are the 5 influences on business locations?

A

Location of raw materials, labour supply, competition, location of market, use of e-commerce

42
Q

Examples of short term and long term finance?

A

Short- overdraft and trade credit
Long- loans, personal savings, share capital, venture capital, retained profit, crowd funding

43
Q

What are the ways to add value

A

Branding, USP, excellent customer service, high quality and design

44
Q

What are the 4 main bases of segmentation?

A

Geographic, demographic, behavioural, physchographic

45
Q

Examples of primary market research?

A

Questionnaires, focus groups, survey, observation

46
Q

Benefits of adding value?

A

Higher price, differentiation from competitors

47
Q

3 purposes of business activities?

A

To produce goods and services, meet customer needs and to add value

48
Q

What does high level of unemployment mean?

A

Consumer income will fall and so will demand, but businesses can recruit more easily

49
Q

What does high level of employment mean?

A

Consumer income will increase so businesses will sell more, but businesses will find it harder to recruit

50
Q

Effects of a rise in interest rates?

A

Businesses less likely to expand and customers less likely to spend

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