Term 1 knowledge Flashcards
Identify 4 potential rewards of risk taking as an entrepreneur
Financial, independence, self satisfaction, changing customer habits
Identify 3 potential drawbacks for risk taking
Financial, health, strained relationships
What do we use a business plan for? (4 reasons)
To clearly state what the business is going to do, to raise finance, provides direction, allows you to compare and monitor
Identify problems associated with a business plan
Plan may be poor quality, needs constantly updating, requires time and effort which may be expensive for small businesses
Identify disadvantages of being a sole trader (6 reasons)
Shortage of capital, illness, hours of work, continuity, shortage of skills, unlimited liability
Identify 4 disadvantages of being a private limited company
Shareholders have to agree about how dividends are distributed, greater administrative costs than sole trader/ partnership, finance limited to “friends and family”, less privacy
Identify 4 advantages of being a public limited company
Limited liability, can raise large amounts of finance via the stock exchange, continuity, borrowing money from a bank will be easier as seen as less of a risk
Define an AIM
States the overall purpose of the business, long term goal
Define an OBJECTIVE
Specific, measurable targets to help meet the aims of the business
What could be a suitable objective for a business?
Profit, increased market share, growth, survival, service
Identify benefits of setting objectives
Direction, focus for employees, allows planning, measurement of success
Identify advantages of being a sole trader (4 reasons)
More control, you keep all the profit, your accounts are private, decisions are easier and quicker to make
Identify advantages of being a partnership
More ideas/expertise, lowers the risk of unlimited liability, shared workload
