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Business Studies Unit 1 > Starting a Business and Marketing > Flashcards

Starting a Business and Marketing Flashcards

0
Q

Give 2 examples of types of firms that are ‘not-for-profit’ firms

A

Charity or if they’re owned by the government

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1
Q

Name 3 types of reasons people set up a business?

A

Financial reasons- to make a fortune
Personal reasons-wanting to be their own boss
Charitable reasons- to help others

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2
Q

What is a social enterprise?

A

They seek profit to fulfil social objectives such as providing help for homeless they are also known as ‘more than profit’ organisations

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3
Q

Name 5 qualities of an entrepreneur

A

The ability to think ahead

Initiative -seek business opportunities

Determination and drive

Networking skills

Leadership

Risk taking

Being able to plan carefully
Able to learn from mistakes

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4
Q

What is a soletrader?

A

People who run the business alone

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5
Q

What are the advantages and disadvantages of being a sole trader?

A
  • they’re easy to set up
  • you get to be your own boss
  • you decide what happens to the profit

You have to work long hours, no ones there to look after the business if your ill or want a holiday

Unlimited liability

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6
Q

What is a partnership?

A

2-20 people run a business ?

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7
Q

What are the advantages and disadvantages of being in a partnership?

A
  • more owners meen more ideas
  • more owners meen mor capital (money) put into the business

Each partner is legally responsible for what the other does
Most have unlimited liability
More owners meens more disagreements, your not the only boss

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8
Q

What is a private limited company (ltd)

A

A company with several shareholders that must all agree on selling shares

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9
Q

What are the advantages and disadvantages of being in a LTD?

A

They have limited liability so they can only loose their capital and dont have the risk of losing their assets

  • they’re more expensive to set up than some traders as they must have a Memorandum of Association (says how the business will be run and where it’s based) they must also have an Article of Association
  • the firm must publish its accounts each year
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10
Q

What is a Menmorandum of Association (LTD’s must have this)

A

When a firm tells the world who they are and where they’re based
Private limited companies must do this

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11
Q

What is franchising?

A

When someone else is given the right to sell a firms products in return for a fee

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12
Q

What is a franchisor?

A

The person who owns the firm

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13
Q

What is a franchisee?

A

The person selling the firms products

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14
Q

What are the advantages and disadvantages of franchising for the franchisee

A

Pros: little chance of bankruptcy as the product sold is from an established firm
Because of the first advantage the firm are likely to get a bank loan
The franchisor is likely to help promote the brand
The franchisor might provide training for the franchisee

Disadvantages:
The franchisee can’t add extra products and must stick to the firms rules (limited freedom)

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15
Q

What are the advantages and disadvantages of franchising for the franchisor

A

Pro: They can increase their market share ( more profit)

Con: if the franchisee has poor customer service standards , it can damage the reputation of the business

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16
Q

What is an objective?

A

They are more specific measurable steps to help a company achieve their aim

They can be used to measure whether the firm has been successful or not

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17
Q

What are the two types of targets objectives are used for and give an example of a potential objective for each of these type of targets

A

Numerical targets-increase profit obj:
Increasing profits by 15% by the end of the year

non-numerical targets-become ethical
Obj: only get products from a fair trade manufacturer

18
Q

Name 5 aims a business owners u have for their business

A 
To survive 
Make a profit 
To have market share & be established
To grow and expand 
Ensure customer satisfaction 
To be ethical and sustainable
19
Q

Name five stakeholders

A 
Employees 
suppliers
 the local community
customers
the government
20
Q

Why are customers important to the business?

A

Without customers the business won’t be able to sell its products therefore the business won’t survive

21
Q

How are the employees of the business important

A

If the employees aren’t happy and motivated the work may become unproductive and they may not give good customer service which will lead to customers not returning and not recommending the business to others they may even bad mouth the business

also if the employees are not motivated staff retention will be lower and staff may begin to leave the business

22
Q

What is the business plan

A

A Business plan highlights what a new business plans to do and how it aims to do it

23
Q

How does the business plan help when setting up a business and raising finance

A

Business plan will help the business calculate how much start up capital they will need.

The business plan can be used to convince banks at the business should be given a loan as it makes the business appear organised and see you might feel better but to pay back the money

If the business has a bad idea the planning and to top the owner to realise this at the early stage so I don’t waste time and money

24
Q

Who does the business plan benefit?

A

The owner of the business and the banks that could potentially loan money to the business

25
Q

What are the seven sections to the business plan?

A 
Personal details 
aims of the company (mission statement)
objectives 
product description 
production details 
staffing requirements 
finance
26
Q

What Are some risks to the business

A

The health of the economy could decline like in the recession in 2009 which closed many businesses

The business do not know the actions of competitors

27
Q

Can a business minimise the risk of what their competitors will do

A

They can regularly carry out market research to make sure their products will still do you well

28
Q

What are some factors that will affect where a business is that located and explain two of these

A

Location of suppliers- being close to their suppliers of raw materials means lower transport costs

Labour supply-if the business is set up in an area of high unemployment, people are eager for jobs so wages can be lower

Transport- if businesses want to trade with different countries being near to railways & seaports is good

Competitors- being near to competitors mean they may be able to steal customers from similar firms vs
Some businesses may want to be far away from competitors so customers are more likely to only choose their business for a particular need

Communication links-

Proximity to market- if the business is far from their customers transport costs will be expensive

29
Q

What methods of marketing will a new/ small business use?

A

They could use more desk research as its cheap and gives the business access to a range of the market. It also allows them to look at past trends and predict the future

Field research they could conduct: telephone surveys
Questionnaires
Internet research
Focus groups (expensive)

30
Q

Why do businesses conduct market research ?

A

To find out what products the customers want, and what price they’re will to pay for it.

31
Q

What are the two types of market research?

A

Field research and desk research

32
Q

What are the 4 aspects of the marketing mix?

A

Price
Place
Promotion
Product

33
Q

What does a market driven firm do?

A

They carry out market research then sell a product that caters to the results of the market research

34
Q

What does a product driven firm do?

A

Their design or invent a new product and try to send it , they usually don’t do you as well as market-driven firms

35
Q

What happens to the demand of a product once the price falls?

A

As Price falls demand rises(e.g why sales attract customers)

36
Q

As Rises Rises

A

As supply rises, price rises

37
Q

Give 3 examples of how businesses can promote their products

A 
Local radio (cheaper than tv) 
Local newspapers 
Magazines 
Posters and Billboards 
Leaflets
38
Q

What are the advantages and disadvantages of a firm promoting their products by the local radio?

A

They’re cheaper than tv

They won’t reach as much people that a the tv will

39
Q

What are the advantages and disadvantages of a firm promoting their products by local newspapers?

A

It’s relatively cheap

May be overlooked by readers of newspaper

40
Q

What are the advantages of a firm promoting their products by magazines?

A

It’s a good way for the business to target a specialist market over a wide area

41
Q

What are the advantages of a firm promoting their products by billboards?

A

They have high visual impact as they’re seen daily by people; normally stay up for long periods of time

42
Q

What are the advantages and disadvantages of a firm promoting their products by leaflets

A

They are cheap to produce and distribute; they can target specific groups.

Some people find them annoying

43
Q

How is the place of business sets itself up important

A

The firm must be in an area that is convenient for potential customers

Business Studies Unit 1 (4 decks)

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