paper one Flashcards
Business enterprise?
Identifying new business opportunities and taking advantage.
How to beat competition?
-Price
-Customer service
-Quality
-Product range
-Location
Primary research?
-Questionnaires
-Phone surveys
-Focus groups
Secondary research?
-Market research reports
-government reports
-newspapers
-magazines
Quantitative vs qualitive
continuous data vs categoric data
Market segmentation
-Demographics: Age + Income
-Location
-Lifestyle
Business market map
graph used to identify gaps in the market
Financial aims
-survival
-increase market share
-maximise profit
-maximise sales
-achieve financial strength
Non financial aims
-personal challenge
-personal satisfaction
-independence + control
-societal benefit
Objective vs aim?
objectives help a business build toward its aims
revenue
income earned
interest (on loans) equation
interest (on loans) = (total repayment - borrowed amount) / (borrowed amount) x 100
break even point (in units) equation
break even point (in units)= (fixed cost) / (sales price - variable cost)
break even point (for revenue) equation
break even point (for revenue)= (break even point (in units)) x (sales price)
margin of safety equation
Margin of safety= actual sales (or budgeted sales) - break even sales
Cash?
money a business can spend immediately
credit?
ability to buy a good/service and pay for it at a later date
trade credit?
businesses give firm one to two months to repay for purchases
overdraft?
lets firm take more money out of bank account than it has paid into, but has higher interest than loans
share capital?
individuals can buy shares in the business; they have partial ownership and business can gain money through issuing shares.
loans?
firm can take out more money out of bank than account has paid into, but has lower interest than overdraft
venture capital
money gained from selling shares to specialists of giving finance to small/new firms
personal savings?
business owner puts own money into business
retained profit?
owners put gained profit back into business
crowd funding
large number of ppl contribute money into business funding
sole trader?
business owned by one person
sole trader pros
-easy to set up
-be your own boss
-profit is all your control
sole trader cons
-longs hours + on holidays
-unincorporated (no legal identity- if business is sued; they sue you
-unlimited liability
-hard to raise money
partnership?
business owned by two or more people
partnership pros
-more idea, skills, expertise
-share the work
-more capital (£) put into business
partnership cons
-each partner is legally responsible for what -other partners do
-unlimited liability
-disagreements
-profits split between partners
limited company?
company owned by shareholders
private limited company?
-shares are sold only if all shareholders agree
-have Ltd after company name
private limited company (Ltd) pros
-limited liability
-easier to get loan/mortgage
private limited company (Ltd) cons
-more expensive to set up; legal paperwork
-legally obliged to publish its accounts every year (doesn’t have to be made public)
franchise?
business give the right for a franchisee to operate under the business brand name, products and services
franchising pros
-instant customer recognition
-less risky than starting own business
-franchiser may provide training for franchisee
franchising cons
-franchisor provides strict rules for business operation
-franchisee has to pay to start franchise, and make regular payments to franchisor
business location factors?
-raw materials
-labour supply
-competition
-location of market
-internet usage
marketing four Ps
-price
-product
-promotion
-place
marketing mix factors (why change it)?
-quality of product
-changes in tech
-obsoletion
-how competitive the market is, and what segment competitors focus on
business plan?
-outlines what a business will do, and how it aims to do it
-business idea
-aims + objectives
-finance
-target market
-marketing mix location
stakeholder?
a party that has interest in a business
E-commerce?
using internet to buy/sell products
business’s digital communication with stakeholders?
-EMAIL
-apps
-live chats
-video calls/meetings
-social media
modern technological pay advancements?
-online payments
-CHIP and PIN
-contactless
what are people aged <22 and out of school leaving age paid
at least national minimum wage
what are people aged >23 paid at least
national living wage
What are businesses not allowed to discriminate against during recruitment?
Equality act 2010
-religion
-race
-age
-sexual orientation
-disabilities
-employees working same job must have same pay
what happens if a business is found to be discriminating?
they have to pay compensation
how is health and safety monitored in a business?
-risk assessments
-safety courses; training 1st aiders
-equipment
consumer rights act 2015?
-product must be fit for purpose
-product must match description
-product must be of satisfactory quality
income tax?
a tax you pay on your earnings
what do people do if income rises at SLOWER rate than inflation?
-people spend higher % of income on necessities
-less money spent on luxuries
what do people do if income rises at a FASTER rate than inflation?
-people don’t have to spend as much on necessities
-greater % of income spent on luxuries
what happens when there is a low interest rate?
-increased spending
-since firms + consumers borrow more money
-less money gained from saving
what happens when there is a high interest rate?
-decreased spending
-more expensive to borrow money
- more money gained from saving
WEAK pound (value of pound is decreased)
-good for EXPORTERS
-bad for IMPORTERS
STRONG pound (value of pound is increased)
-bad for EXPORTERS
-good for IMPORTERS
innovation definition
process of adapting or inventing a product over time to improve its features
demographics definition
characteristics of populations
-e-commerce
-m-commerce
definitions
-business transactions over internet
-business transactions using mobile device
