T1.4 - Making the business effective Flashcards
Advantages of sole traders? x3
-easy to start up
-be your own boss
-decide what happens to profit
disadvantages of sole traders? x4
-work long hours
-unincorporated (not separated from owner)
-unlimited liability (responsibility)
-hard to raise money
advantages of partnerships? x3
-more ideas and skills
-share work
-more capital (money) put into business
disadvantages of partnerships? x4
-responsible for partner
-unlimited liability (responsibility)
-disagreements
-profits shared
What is a limited company?
company owned by shareholders
feature of limited companies? x4
-incorporated (own identity)
-money and property in company’s name belong to company not owners
-owners only risk loosing money invested
-owned by shareholders
Why do limited company owners have limited liability?
they are incorporated
What is a private limited company?
a company where ownership is resitricted
Advantages of a private limited company? x2
-limited liability
-easy to get loan or mortgage
disadvantages of a private limited company? x2
-more expensive due to legal paperwork
-have to publish its accounts every year
What are the product manufactures of a franchise called?
franchisors
What are firms selling the franchises products called?
franchisees
Advantages of franchising? x3
-already have recognition
-less risky
-provided with help from franchisor
disadvantages of franchising? x2
-strict rules
-pay a lot to start and run franchise
Factors influencing business location? x6
-proximity to market
-labour supply
-proximity to materials
-proximity to competitors
-using internet
-nature of business
