Topic 1 Business Activity Flashcards
What is enterprise?
-A business or company
Define an entrepreneur.
- A person who takes the risk of starting and running a business
Define a business.
-An individual or organization whose aim is to satisfy the needs or wants of consumers by providing good and/or services that they will buy.
State the risks of starting a business
-(Financial) - possibility of losing money
-(health) - can affect mental health e.g. stress
State the rewards of starting a business.
-(Financial) - some successful entrepreneurs make money
-(Independence) - some people like to be their own boss
List three characteristics of an entrepreneur .
-Risk-taking
-Determination
-Creativity/innovative
-Confidence
-Hard Working
-Organised
Why do people start their own business?
-To make a profit
-To invest money
-To create a work-life balance
-To make use out of their skills and interets
-To be their own boss
Define a business plan.
-how a business aims to achieve its objectives
What is the purpose of a business plan?
-To reduce the risk of starting a business
-To help a business succeed
What is the role of a business plan
-To identify markets
-To assist with finance
-To identify the resources that are needed
-To achieve a business aim or objective
List the contents of a business plan
-Aims and Objectives
-Target market
-Competition
-Business idea
-People running it
-Market research
-Finance
Define finance.
-The money needed to start a business
Define unlimited liability.
-Responsibility for the debts of the business rests with the owners (business and owner are one)
Define capital
-Money raised to start or develop a business
Define a deed of partnership.
-A document setting out the operations of the partnerships.
What is a sleeping partner?
-Someone who invests in a business but does not
Define limited liability.
-When a business is not responsible for its debts (the business and owner are separate)
Define a shareholder.
-Owner of a limited company
-Someone who has shares in a business
Define a dividend
-Money paid to shareholders from the business
List the advantages of running as a sole trader.
-Easy to set up
-Little finance is required
-Full control
-Keep all then profits
-Financial information is private
List the disadvantages of operating as a soul trader.
-Unlimited liability
-Business cannot run if ill or on holiday
-Long working hours
-Shortage of capital
-Skills shortage
List the advantages of operating as a partnership.
-More capital available
-Easy to set up
-More skills available (shared)
-Shared workload
-Financial info is private
List the disadvantage of operating as partnership.
-Shared profit
-Unlimited liability
-Shortage of capital
-Slower decision making
-No continuity
List the advantages of operating as a private limited company.
-Limited liability
-Continuity
-Can raise capital more easily
-Control over share sale (invited to buy)
List the disadvantages of operating as a private limited company.
-Financial information is available to the public
-Complex and expensive to set up
-Sale of shares is restricted to 50
-Dividends to be paid
List the advantages of operating as a public limited company
-Can raise capital by selling shares on stock exchange
-Easier to borrow money
-Limited liability for shareholders
List the disadvantages of operating as a public limited company
-Possibility of a takeover
-£50,000 required
-Financial information available to the public
Define business objectives.
-What the business wants to achieve
Define business survival.
-The business can afford to pay for its costs but nothing else
Define profit.
-The difference between revenue and costs
Define market share.
-The share of the total market for a product
