Section 1 - Business In The Real World Flashcards
What is a business?
A business is an organisation that provides good and/or services to the customer
Why is a business set up?
- To offer services or goods
- To earn revenue
What formats of businesses are there?
Primary - raw goods
Secondary - manufacturing
Tertiary - service
Give an example of a service.
A bank
Give an example of a good
Smartphone
What is the opportunity cost?
the amount of sacrifice making a decision has
What are economies of sale?
Businesses can get discounted rates if they build or buy in bulk
What is a social enterprise?
This is a scheme, like the john lewis partnership, who whose works benefit the community and their workers.
Example of Social enterprise (not already mentioned) and why?
‘The big issue’ because they give a large percentage of money to the person selling it.
Why do companies have social enterprises?
- To help the community
- To boost their popularity (rarely)
What is a need?
A need is something that we need to survive. Food, water, warmth.
What is a want?
A want is something that we don’t need, but desire. Most businesses are a want.
What are factors of production?
These are factors that are available for businesses to use. They are land, labour, enterprise and capitol.
What is a sole trader?
People who own a business by themselves, and don’t have any investors apart from themselves.
Advantages of a sole trader?
It’s simple, easy to operate and easy to set up. The owner gets all of the say in the business and it is under his direction.
Disadvantages of a sole trader?
The owner has unlimited liability and takes all of the risk.
What is unlimited liability?
This is when there is no difference between the personal life and business life of the owner. If the company went into debt, they would be responsible and would have to pay.
