KT10: 1.5.3 Business objectives, 1.5.4 Forms of business

Question 1

Budgets

Answer 1

an agreed ceiling on the monthly spending by any department or manager

Question 2

Corporate objectives

Answer 2

targets for the whole business, such as profits to rise by 20% a year for the next three years

Question 3

Delegation

Answer 3

passing authority down the hierarchy, to allow more junior employees some decision-making power

Question 4

Entrepreneur

Answer 4

someone who makes a business idea happen, either through their own effort or by organising others to do the work

Question 5

Mission

Answer 5

a business aim expressed to make it seem especially powerful or motivating

Question 6

Mission statement

Answer 6

a short, powerfully expressed sentence or two that explains the business aims clearly yet motivationally

Question 7

Objectives

Answer 7

targets precise enough to allow praise or blame to the person in charge

Question 8

Shareholder value

Answer 8

the mix of shareholder dividends and a rising share price that stem from high and rising profits

Question 9

Staff retention

Answer 9

literally retaining (keeping) staff, usually measured as staff still remaining at the end of the year as a percentage of the total workforce

Question 10

Strategy

Answer 10

a medium-to-long term plan for meeting your objectives

Question 11

Bankrupt

Answer 11

when an individual is unable to meet personal liabilities, some or all of which can be as a consequence of business activities

Question 12

Creditiors

Answer 12

those owed money by a business- for example suppliers and bankers

Question 13

Franchisee

Answer 13

an independent business that has brought the rights to use a better-known firm’s logos and trading practices within a specified area

Question 14

incorporation

Answer 14

establishing a business as a separate legal entity from its owners, and therefore giving its owners limited liability

Question 15

Limited liability

Answer 15

owners are not liable for the debts of the business; they can lose no more than the sum they invested

Question 16

Registrar of Companies

Answer 16

the government department which can allow firms to become incorporated. It is located at companies house, where Articles of Association, Memorandums of Association and the annual accounts of limited companies are available for public scrutiny

Question 17

Sole-trader

Answer 17

a one-person business with unlimited liability

Question 18

Unlimited liability

Answer 18

owners are liable for any debts incurred by the business, even if this requires them to sell all their assets and possessions and become personally bankrupt