Section 1 Flashcards
what is barter / what are the problems with barter
the exchange of goods without money
problems - double coincidence of wants , storage , goods not divisible and no exact value
money
can be divided, can be exchanged , has value and can be stored
bill of exchange
to settle debts sent to buyer from supplier
electronic funds transfer
no physical money
credit cards
loan from the bank which u have to pay back
debit cards
funds from your acc
standing order
instruction too bank to make fixed payment
direct debit
like a standing order but amount varies
cheques
persons name receiving, signature of person issuing cheque , date , amount , serial number
telegraphic money transfer
money sent to relative over seas
private sector
owned by private individual , aim is to make a profit
public sector
owned by gov. aim is to supply public
nationalisation
when a private company is bought over by the gov
privatization
when a private company buys over a gov business
sole trader
small , owner keeps profit , few employees .
disadvantages - unlimited liability, limited in expansion
partnerships
2-20 persons, share workload , more capital , can expand more easy
disadvantages - conflicts can arise, unlimited liability
co-operatives
owned and controlled by members , buy shares to become a member
types of cooperatives
consumer - share profit equally
financial - members are paid dividends
franchises
firm with a successful product allows another business to use their name and product for a fee
advantages- ready made product , loans are given easily
disadvantages- all royalties go to host
multinational
larger companies operating in smaller branches worldwide
they supply job s to locals , higher ranked employees pass on skills
disadvantages- most profit goes to host , export labour where its cheap
companies
private- family oriented
public- owned by member of public who purchase shares in stock market
production
makes product , run by production manager , gather raw materials
marketing
pricing must be done, advertising , distribution , research
finance
keep accurate acc, seek finance , prsent acc
humans resources
hire and recruit , create ads to employ workers. ensure safety , provide training
research and development
improve existing products , keep business up to date with trends
stakeholders
owners are main stakeholders , they expect business to make a profit ,pay wages
customers- purchase products and give feedback
employees- help sell/make profit
community- business employs workers and assist with donations
gov- ensure business pays tax, follows laws
pressure groups - ensure business pays wokers
ethical and legal issues
money laundering - when criminals cover up their profits of their criminal conduct
NIS- if a business does not pay this it is illegal to operate
consequences of unethical behaviour
gives bad image to business, cheats the gov, face fines ,
economic system
subsistence economy - people live in family groups , grow most food
command economy - all economic decision made by gov, demands are not influenced by public
advantages- need of everyone are met
mixed economy- mixture of free and controlled
functions of management
planning - establishing goals , creating plans
organizing- find resources , people and finance
directing - giving clear instructions
controlling - making sure workers achieve goals
coordinating - work as a team
delegating - assigning task to persons
motivating - encouragement
managements responsibilities
owners- maximize profits
employees- ensure good working conditions and are paid well
society- business does no harm to environment
gov- taxes are paid and laws are followed
customers - fair prices and good service
organization charts
shows business structure ,span of control and chain of command
line structure
traditional -n authority and responsibility is dispersed top to bottom
line and staff
specialist workers to different departments
leadership
responsible, flexible , focused , intelligent
leadership styles
autocratic - make all decision , controls everyone
democratic - consults everyone
laissez faire- little supervision occurs , gives guidelines to workers
conflicts at work
poor relationship, insufficient pay, poor working conditions , poor communication
strategies of employers
lockout - prevent anyone from entering premises
close business
employee strategies
strikes or work to rule or still ins
representors of workers
trade unions such as OWTU, ttutab
communication
internally - workers and management
externally - suppliers and customers
effective communication
clear message , right medium to send message , respond to message
problems with communication
message wasnt understood, medium was not suitable , no feedback
solutions to problems of communication
make sure message is clear, right resources to send message , meetings
entrepreneur
someone who starts an runs a business, they are risk takers eg. food , clothes , hair dressing
characteristics of entrepenure
creativeness, persistent, flexible , risk taker
roles of entrepreneur
conceptualization - come up wit idea, planning - long term is for the future and short term may be for 1 or 2 days , accessing funds such as capital and acquire assets ,operating the business- increasing sales and keeping records
roles of entrepreneur
conceptualization - come up wit idea, planning - long term is for the future and short term may be for 1 or 2 days , accessing funds such as capital and acquire assets ,operating the business- increasing sales and keeping records
entrepreneur and the economy
helps provide jobs , creates linkages with businesses, provides goods and services and helps the nation grow
reasons for starting a business
control over working life , financial independence , self fulfillment, increase income
collecting data
primary data - collecting data yourself
secondary data - looking at what someone else has collected
feasibility studies
piece of research to see if a business will work
why do a feasibility study
to tell whether or not u should continue with the project , identify cost , identify possible sources of finance
steps in starting a business
Conceptualisation, Research , Identify resources, business plan, accessing funds , operating business
parts of business plan
executate summary - name address objective products offered
operation plan- how business is goin to operate
business opportunity-details about product and service
marketing plan- prices , method of promotion , target market
financial forecast- how mucb sale u expect to make , profit and loss forecast
expansion of business - future plan for business
planning of business
short term- cater for up to a year
medium term - around 2 years
log term- caters up to 5 years
collateral
security for repayment on a loan
contarct
a legal agreement where b by something is done and is enforced by law
types of contracts
simple - 2 or more persons , no special form , made by mouth or sometimes writing
specialty - must be written , signed , sealed and delivered
types of contracts
simple - 2 or more persons , no special form , made by mouth or sometimes writing
specialty - must be written , signed , sealed and delivered
elements of contract
legality, agreement, capacity , good faith , consideration , offer and acceptance
offer
offeror, offeree
this must be specific and direct
counter offer
when a person rejects the original offer and makes a new one
acceptance
an unconditional agreement to all terms of an offer
consideration
the price that the parties to a contract receive
void / voidable contracts
void - not enforced by law
voidable - enforced by law
business documents
auditing purposes
letter of enquiry
request information about goods and prices and delivery
quotation
sends this to person who sent enquiry has price list , goods , discounts ,
purchase order
place of delivery , quantity of goods , date of delivery, agreed price
requestation
a request of supplies internally
acknowledgement of order
seller sends this to buyer to say the order has been received
advice note
tells buyer good are on there way
delivery note
packed with goods, to check if items corresponds with order
invoice
sent to buyer from seller to advise how much is owed
proforma invoice
for newer customers
credit note
shows if customer is entitles to a reduction in amount due for being charged to much
debit note
shows if customer need to pay additional for being charged too little
tax on purchases
paid when purcases are made
statement of acc
the demand for payment sent out at the end of the month to sum up all transactions
payments of debts
by cash , by cheque , bankers draft , online banking
stock records
can be used iternally and externally
stock levels
minimum- lowest level the stock is allowed to fall
max- the greatest figure that the stock of a particular item is allowed to rise too
