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Business Edexcel > Theme 1 Rev Cards > Flashcards

Theme 1 Rev Cards Flashcards

1
Q

Bread and butter topics:

A
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2
Q

Why new business ideas come about

A

Change in technology
Changes in consumer taste
Product becoming obselete

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3
Q

How new business ideas come about

A

Original idea
Adapted existing product/ service

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4
Q

Impact of risk on a business

A

Business failure
Financial loss
Lack of security

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5
Q

Impact of reward on a business

A

Business success
Profit
Independence

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6
Q

Purpose of business

A

Produce goods or service
Meet customer needs
Add value

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7
Q

Role of an entrepreneur

A

Organise resources
Take risks
Business decisions

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8
Q

What are customer needs

A

Price
Quality
Choice
Convenience

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9
Q

Market research

A
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10
Q

Whats point of market research

A

Identify gaps in the market, reduce risk and inform business decision

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11
Q

What is primary research?

A

The collection of original data and info for a specific purpose

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12
Q

Types of primary research

A

Surveys, questionnaires, focus groups

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13
Q

What is secondary research

A

Second hand research

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14
Q

Types of secondary research

A

Internet
Market report
Government report

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15
Q

What is qualitative & quantitative data

A

Qualitive not numerical data or info. Looking for quality and observations

Quantitative data measured in numbers

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16
Q

Segmentation

A
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17
Q

What are the various segments the business may target

A

Location, demographics, lifestyle, income and age

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18
Q

How do u find market research in a business

A

Market mapping

19
Q

Competitive environement

A
20
Q

Factors businesses will compete on

A

Price, quality, product range, location, customer service

21
Q

Aims and objectives

A
22
Q

Financial aims and objectives

A

Financial:
Survival, Profit, grow sales, grow market share, financial security

23
Q

Non financial aims and objectives

A

Social objectives, personal satisfaction, challenge, independence, control

24
Q

Formula for profit

A

Profit= revenue - total costs
Total costs= total variable costs + fixed costs
Total variable costs= variable costs per unit x amount of units
Break even point in £= BEP x Price
Margin of safety= actual sales - budgeted sales

25
Q

Break even analysis

A

If fixed costs go up ➡️ break even output goes higher= bad

If Fixed costs go down➡️ break even output lower= good

26
Q

Break even point analysis

A

Cons: only an estimate
Pros: make production and pricing decision

If FC goes up➡️ break even output higher= Bad

If FC goes down➡️ break even output lowers= good

27
Q

Break even point analysis

A

Cons: only an estimate
Pros: make production and pricing decision

If FC goes up➡️ break even output higher= Bad

If FC goes down➡️ break even output lowers= good

28
Q

Cash flow

A
29
Q

Why is cash flow important

A

Important to pay suppliers- employees , reduce risk of business failure

30
Q

Cash flow formulas

A

Net cash flow= inflows - outflows
Opening balance= closing balance of previous period
Closing balance= opening balance + net cash flow

31
Q

Sources of finance

A
32
Q

Short term sources of finance

A

Overdraft & trade credit

33
Q

Long term source of finance

A

Personal savings, venture capital, share capital, loans, retained profits, crowdfunding

34
Q

Limited liability

A

Limits the losses of a company’s owners to the amount of their investment

35
Q

Pros of running a franchise

A

Proven business model, already has brand recognition, support from franchisor- expertise, less risk

36
Q

Cons of running a franchise

A

High start up fees, have to pay royalties, lack of flexibility

37
Q

Marketing mix

A

Price- what do you charge
Promotion- where/ how you promote
Product- what is unique about your product?
Place- how does the customer purchase it?

38
Q

Legislation

A
39
Q

Point of consumer law?

A

Ensure quality is there and consumer rights are up held

40
Q

What is the point of the employment law?

A

To ensure employees are protected in terms of pay, recruitment, no discrimination And the workplace is safe

41
Q

Economy

A
42
Q

What is the impact of increase interest rates?

A

If businesses have debts- higher interest repayments- higher costs- less profit

43
Q

Impact of increase exchange rate

A

Spice
Strong pound imports cheap exports dear
Good for businesses that import for businesses that export

Business Edexcel (2 decks)

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