making the business effective

Question 1

what is limited liability

Answer 1

the business owner or owners are only responsible for business debts up to the value of their financial investment in the business

Question 2

what is a private limited company

Answer 2

has limited liability, ‘Ltd’,

Question 3

what is unlimited liability

Answer 3

the business owner or owners are personally responsible for all of the debts of the business, no matter what the value.

Question 4

what is a sole trader

Answer 4

a business that is owned and run by one person, usually start up/small businesses.

Question 5

what are advantages of a sole trader

Answer 5

quick/easy/cheap to set up, makes own decisions, keeps profits

Question 6

what are disadvantages of sole traders

Answer 6

risk unlimited liability, works long hours, high level responsibility

Question 7

what is a partnership

Answer 7

a type of business that has 2-22 owners

Question 8

advantages of partnership

Answer 8

quick/easy to set up, shared knowledge/responsibility/workload

Question 9

disadvantages of partnership

Answer 9

conflict, unlimited liability, shared profits

Question 10

what are the owners of a private limited company called

Answer 10

shareholders

Question 11

advantages of private limited company

Answer 11

limited liability

Question 12

disadvantages of private limited company

Answer 12

more paperwork, less private?, time consuming to set up

Question 13

what is a franchise

Answer 13

gives the right to another person or business to sell goods or services using its name.

Question 14

what is a franchisee

Answer 14

a business that agrees to manufacture, distribute or sell branded products under the licence of a franchisor

Question 15

what is a franchisor

Answer 15

gives franchisees the right to manufacture, distribute or sell its branded products in return for a fixed sum of money or
royalty payment

Question 16

disadvantages of setting up a franchise

Answer 16

expensive to set up, franchisee has to consult franchisor before making any decisions, competitive, royalities

Question 17

advantages of setting up a franchise

Answer 17

free training/marketing, established business already, easier to make money, lower risk

Question 18

who does proximity to market refer to and why is important

Answer 18

customers- easier to attract costumers if they are nearby as they find it convenient

Question 19

who does proximity to labor refer to and why is it important

Answer 19

employees- easier to attract the correct skill level if you are in the right area

Question 20

who does proximity to materials refer to and why is it important

Answer 20

suppliers- saves money if you are closer as transport is shorter

Question 21

who does proximity to competitors refer to and why is it important

Answer 21

competition- depending on the type of business being close to competitors (clothing/car shops) is more beneficial where being far away (corner shops/hairdressers) is more beneficial

Question 22

where do retail companies prefer to be located

Answer 22

proximity to consumers

Question 23

where do service companies prefer to be located

Answer 23

anywhere, maybe near consumers

Question 24

where do manufactoring companies prefer to be located

Answer 24

cheap to rent land, need to transport long distances

Question 25

what allows business to be 24/7, international and cheap location/promotion

Answer 25

e/m-commerce

Question 26

what makes up the marketing mix

Answer 26

product, price, place, promotion

Question 27

what can a business do to ensure its product is to the best standard

Answer 27

market research to find wants/needs of target market, USP to help product stand out

Question 28

whats factors influence price

Answer 28

competition, customers opinion, brand image, availability

Question 29

what is a channel of distribution

Answer 29

the different ways in which a product gets from the producer to the end consumer.

Question 30

what is a business plan

Answer 30

a document created by a business or entrepreneur that provides details about each element of the business

Question 31

what is a business plan made up of

Answer 31

business idea, aims/SMART objectives, target market, revenue forecast, cash flow forecast, sources of finance, marketing mix, location

Question 32

why is a business plan important

Answer 32

banks/investors may review business plans to test legitimacy, entrepenuers can overview their business and see where they can improve