Topic 1 Flashcards
Why does a business exist?
To help others
Financial reasons ( steady income )
Personal reasons ( want to be own boss )
What is the most important business aim
To make profit and survive the first year
Name 4 aims of a business
Be the biggest in the market
High quality product or service
Expand Theo business
Satisfy custom.
What is a public sector and state a key face about it
Public sector is owned by the government
Nod for profit
Only needs enough money to cover costs
Name two advantages and two disadvantages of being a franchise
Advantage Selling an established product Product already has a reputation Wider marketing to promote Franchiser provides training
Disadvantage
Only sell products of franchise
Ran by franchise rules = no freedom
What do enterprises do
Identifying new business other unities
Find a gap in the market
New business ideas or expand on an existing business
Target a market niche
State 5 qualities an entrepreneur may have
Initiative
Risk taker
Determination
Learn from mistakes
Leadership
What is a market niche
A small part of a market with customers of particular needs
List 2 advantages and 2 disadvantages of becoming a sole trader
Advantage
Easy to set up
Own boss
Decide what happens to the profit
Disadvantage
Long hours
Unlimited liability
List 2 advantages and 2 disadvantages of being a partnership
Advantage
More ideas
Share work
More owners = more capital ( money )
Disadvantage
Legally responsible for every partners actions
More disagreements
State 2 advantages and 2 disadvantages of being a private limited company
Advantage
Limited liability
Can’t loose any money invested
Disadvantage
More expensive
Legally obliged to publish accounts
What is limited liability
What is unlimited liability
Limited liability means the owner only risks loosing the money they invest into the business
Unlimited liability means that you may have to use assets to pay back what you owe
