theme2.1 Flashcards
why do businesses grow?
profit and survival
how do businesses grow?
organic and inorganic
what is the difference between organic and inorganic growth?
organic is internal and inorganic is external
how can you internally grow a business?
taking advantage of technology. changing marketing mix. expanding overseas
how can you externally grow a business?
merging and takeover
example of merger and takeover.
merger- curry’s and PC world
takeover- pound land and 99p store
what is offshoring?
when you expand your business overseas
what are 2 anagrams for economies and diseconomies?
economies- FBTR
diseconomies- PCCM
what is economies and diseconomies of scale?
diseconomies- bad things that can happen to a business
economies- good things that can happen to a business
what is the difference between and LTD and PLC?
LTD- private limited company
PLC- public limited company
what are the advantages + disadvantages of a PLC?
+ raise capital quickly
+ limited liability
x exposed
x costly administration
what do we mean by ‘floating shares’?
buying shares on the stock market is online so the shares are floating.
what is the difference between aim + objective?
aim- long term
objective- short term
how do aims and objectives change as your business grows?
they grow along side the business
list 2 internal and 2 external sources of finance a large business can use.
internal- retained profit, sale of assets
external- loan, share capital
what is retained profit?
money left over from a previous business
give an advantage and disadvantage of retained profit.
advantage- able to re-invest into the business
disadvantage- once it is used it is gone.
difference between overdraft and a loan
overdraft- short term amount of money from the bank
loan- a long term amount of money from the bank
advantages and disadvantages of crowdfunding
+ brand awareness
+ easy and quick
x takes time
x give money back if all is not raised
what is share capital? give 1 advantage and disadvantage.
selling shares to family and friend.
+ no interest
x these shareholders will then be entitled to share off the profits of the business.
