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Business > Theme 1: Investigating a small business > Flashcards

Theme 1: Investigating a small business Flashcards

1
Q

define enterprise

A

business

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2
Q

define entrepreneur

A

the person who starts a business taking a calculated risk

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3
Q

define goods

A

a physical product that can be held (tangible), used and stored

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4
Q

define services

A

intangible actions

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5
Q

define dynamic

A

always fluctuating

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6
Q

define obsolete

A

no longer wanted/in use

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7
Q

define innovation

A

new ideas, creations and methods

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8
Q

why is the market dynamic?

A
  • customer needs/demands change
  • new features, tech
  • things become obsolete
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9
Q

define added value

A

the difference between the cost of making (input) and the price you are selling it at (output)

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10
Q

define USP

A

Unique Spelling Point - a feature a business that has to stand out from the competition

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11
Q

how can a business add value? (3)

A
  • focus on target audience
  • design
  • have USP
  • branding
  • convenience
  • quality
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12
Q

how can a business benefit from adding value? (3)

A
  • charging a higher price
  • attracting more customers
  • competing with competitors
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13
Q

what are some rewards for enterprise? (3)

A
  • profits
  • capital gains (made by selling part/full of the business)
  • self-esteem
  • independence
  • satisfaction
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14
Q

what are some risks for starting a business? (3)

A
  • no investment
  • loose time
  • loose passion
  • financial instability
  • debt
  • business failure
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15
Q

define aim

A

states the overall purpose for the business (long terms goal)

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16
Q

define objectives

A

specific measurable targets to help meet the aims

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17
Q

what does SMART stand for?

A

Specific
Measurable
Attainable
Relevant
Time-based

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18
Q

what categories are there in customer needs?

A
  • price
  • quality
  • choice
  • convenience
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19
Q

how can a business meet customer needs?

A
  • mass market
  • personal relationships with customers
  • niche market
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20
Q

define market research

A

gathering info about the market and customer needs in order to inform business decisions

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21
Q

why research the market?

A
  • reduce the risk of failure
  • find out customer needs
  • predict and be prepared for market changes
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22
Q

what are types of market research?

A
  • primary research
  • secondary research
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23
Q

what are examples of primary research methods?

A
  • Interviews
  • Observation
  • Questionnaire
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24
Q

what are examples of secondary research methods?

A
  • internet
  • businesses’ own sales records
  • government stats
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25
Q

what is the research process?

A
  • identify what needs to be found out
  • choose research method
  • data gathered and analysed
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26
Q

define sample

A

a small group of people within the population which is chosen to be surveyed

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27
Q

what are the 2 types of data?

A

qualitative and quantitative data

28
Q

define qualitative data?

A

the opinions and attitudes of target audience

29
Q

define qualitative data

A

data that can be expressed as stats and numbers

30
Q

define market segmentation

A

dividing up the market or potentials customers into groups

31
Q

what are some types of market segmentation?

A
  • location
  • demographics
  • behaviour
  • lifestyle
  • income
32
Q

name a benefit from market segmentation

A

increases brand loyalty and repeat custom

33
Q

name a drawback from market segmentation

A

increased costs linked to research

34
Q

what does market mapping show?

A

shows the position of products in terms of 2 qualities which are important to customers

35
Q

what is the marketing mix?

A

factors that help businesses take into account customer needs when selling products

36
Q

what are the 4Ps

A

Price
Product
Place
Promotion

37
Q

when should a business charge a high price? (3)

A
  • good brand loyalty
  • lack of supply/high demand
  • competition charges high prices
38
Q

when should a business charge a low price? (3)

A
  • lots of supply/low demand
  • poor quality
  • sell stock quickly
39
Q

what are the 4 catgories a business can sell its product/services as in terms of price and quality?

A

Economy (L&L)
Skimming (Lq&Hp)
Market penetration (Lp&Hq)
Premium (H&H)

40
Q

what is direct competition?

A

businesses that produce the same good/services as you

41
Q

what is indirect competition?

A

businesses that produce alternatives to what you do

42
Q

impacts of competition on the marketing mix?

A
  • product will constantly develop
  • price might be lowered
  • promotion might increase
  • place focused on customers as opposed to the business
43
Q

impacts of NO competition on the marketing mix?

A
  • product may be lower quality
  • price high
  • promotion no need
  • place focused on business convenience as opposed to customers
44
Q

what are advantages of e-commerce? (3)

A
  • can sell 24/7
  • expand to (inter)national
  • easy data recording and analysis
45
Q

what is a disadvantage of e-commerce?

A

can’t have personal contact with customer

46
Q

what are some types of promotion? (3)

A
  • tv adverts
  • word of mouth
  • product placement
  • billboards
  • personal selling
  • direct mail
47
Q

how is Place different to loction?

A

place is based on how the products get from producer to consumer and where they can access them (location is where the business is setup)

48
Q

what are the main factors influencing a business’s location? (3)

A

proximity to:
- raw materials
- the market
- labour
- competition
costs to run
nature of business

49
Q

define fixed costs

A

costs that do not vary directly with output

50
Q

define variable costs

A

costs that vary directly with output

51
Q

how to calculate the contribution per unit?

A

the price - VC per unit

52
Q

what is the break even point?

A

the number of units its needed to sell to pay of all costs (no profit or loss)

53
Q

how to calculate BE?

A

FC/contribution per unit

54
Q

define revenue

A

the money made from sales of goods and services

55
Q

how to calculate revenue?

A

FC/contribution per unit

56
Q

what is the BE on a graph?

A

when the total revenue = total costs

57
Q

define profit

A

the money you take after paying the costs

58
Q

how to calculate profit?

A

unit contribution x N.O of sales over breakeven OR total revenue - total costs OR margin of safety x unit contribution

59
Q

how to calculate total costs

A

(VC x N.O of sales) + FC

60
Q

how to calculate BE

A

FC/contribution costs

61
Q

what is the margin of safety?

A

the difference between the actual output and the BE output

62
Q

what is cash inflow?

A

the money that moves into the business

63
Q

what is cash outflow?

A

the money that moves out of the business

64
Q

what is net cash flow

A

inflow - outflow

65
Q

define USP

A

unique selling point - something that makes product stand out from its competitors

66
Q
A

Business (2 decks)

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