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Netra Business Gcse OCR 9-1 > Topic 1-Business Activity > Flashcards

Topic 1-Business Activity Flashcards

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1
Q

Why do businesses exist?

A

Businesses exist to satisfy the needs and wants of customers. They provide goods and services at a price that people are willing to pay, in return for a profit.

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2
Q

What are goods?

A

Goods are tangible, physical items.

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3
Q

What are services?

A

Services are intangible.

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4
Q

Does spotting an opportunity have to be a new idea?

A

No.

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5
Q

What is spotting an opportunity?

A

The ability to see the need for a particular product or service that customers want.

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6
Q

What is an entrepreneur?

A

A person who sports an opportunity to help run their business and has enterprise skills to help them become successful.They take a risk in the hope of making a profit.

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7
Q

Give 3 characteristics of an entrepreneur.

A
  • Risktaker.
  • Organised.
  • Serious.
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8
Q

Why do we need entrepreneurs?

A
  • To create jobs.
  • To help economic growth.
  • Prosperity.
  • Greater choice for customers.
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9
Q

What is a financial risk?

A

Losing all of the money that you have invested. If you have borrowed money you could be in debt.

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10
Q

What is a health risk?

A

The risk of overworking because of stress, long hours and hard work.

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11
Q

What is a relationship risk?

A

The risk of not having enough time to spend with your family or even if you are with them not being fully focused on your time together.

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12
Q

What is a time risk?

A

The risk of not having enough time for yourself.

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13
Q

What is a failure risk?

A

The risk of you business having to close and so losing reputation.

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14
Q

What’s an independence reward?

A

The reward that you can choose what you do and when you do it.

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15
Q

What is the self satisfaction reward?

A

The reward of feeling achievement for making your business.

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16
Q

What is the reward of changing customer habits?

A

You change the products that they may use to perhaps more healthier ones.

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17
Q

What is a financial reward?

A

Making a profit.

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18
Q

How can risks be reduced?

A
  • Contingency planning.
  • Create a business plan.
  • Speak to experts.
  • Market research.
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19
Q

What is a contingency plan?

A

Keeping money aside so you have a backup plan incase you run out of money.

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20
Q

Why is speaking to an expert a good idea?

A

They may pick up on faults in your product.

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21
Q

What is an aim?

A

A long term goal a business wants to achieve.

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22
Q

Give 5 examples of an aim.

A
  • Providing a service.
  • Market share.
  • Survival.
  • Growth.
  • Profit.
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23
Q

What is an objective?

A

A step a business will take to work towards achieving its aim.

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24
Q

What does market share =?

A

Market share=The sales of 1 business divided by the sales of 1 market.

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25
Q

What is limited liability?

A

There is a limited amount they can lose because they can only lose what they invest.

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26
Q

What is unlimited liabilty?

A

When there is no limit as to how much a business can use.

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27
Q

What is capital?

A

The money invested in a business.

28
Q

Give the four types of businesses.

A
  • sole trader.
  • Partenership.
  • Public limited company.
  • Private limited company.
29
Q

What are the advantages of being a sole trader?

A
  • Easy to set up.
  • You are your own boss.
  • You get to decide what happens with the profit.
30
Q

What are disadvantages to being a sole trader?

A
  • Unlimited liability.

- Work long hours.

31
Q

What are some advantages to being a partnership?

A
  • More ideas.
  • More money put into business.
  • Financial information is private.
32
Q

What are some disadvantages to being in a partnership?

A
  • They are legally responsible for each other.
  • Unlimited liability.
  • Disagreements.
33
Q

What are some advantages to being a private limited company?

A
  • Limited liabilty.
  • Continuity.
  • Incorporated.
34
Q

What does incorporated mean?

A

A business can continue trading after a share holder dies.

35
Q

What are disadvantages to being a private limited company?

A
  • Expensive to set up.

- Has to publish financial information.

36
Q

What are some advantages of being a public limited company?

A
  • More capital can be raised.
  • Continuity.
  • Easier to borrow money.
  • Limited liability.
37
Q

What are disadvantages to being a public limited company?

A
  • Each share holder has little say on how the company is run.
  • Easy for takeover.
38
Q

What is a stakeholder?

A

An individual or a group with an interest in a business.

39
Q

What are the two types of stakeholders?

A

Internal and external.

40
Q

Which stakeholders are internal?

A
  • Owners.

- Employees.

41
Q

Which stakeholders are external?

A
  • Customers.
  • Suppliers.
  • Government.
  • Local community.
42
Q

What is the owners main interest?

A

Profit.

43
Q

What is the employees main interest?

A

Wages.

44
Q

What are customers main interest?

A

Price.

45
Q

What is the suppliers main interest?

A

Quality of goods they supply.

46
Q

What is the governments main interest?

A

Laws.

47
Q

What are the local community’s main interests?

A

Environment, noise, pollution etc…

48
Q

What is a business plan?

A

A formal document which sets out future business goals and helps attract funding for the business idea.

49
Q

What is the purpose of planning out business activity?

A

To reduce the risks and to help a business succeed.

50
Q

What 5 things will a business plan contain?

A
  • Target market.
  • Market research.
  • Objectives.
  • Idea.
  • Finance.
51
Q

What is the role of a business plan?

A
  • To help identify target markets.
  • To help with finance.
  • To identify resources that businesses need to operate.
  • To achieve business aims and objectives.
52
Q

What is sales revenue?

A

The money a business receives from customers by selling its goods and services.

53
Q

What is the formula for sales revenue?

A

Revenue=quantity sold x selling price.

54
Q

What are the two types of growth?

A

Inorganic and organic.

55
Q

What is organic growth?

A

Growth by increasing its own size rather than with another business.

56
Q

Give for examples of organic growth…

A
  • Increasing output.
  • Gaining new customers.
  • Developing new products.
  • Increasing market share.
57
Q

What is the formula for market share?

A

Market share=(sales of one/sales in total)x100.

58
Q

What are the two types of inorganic growth?

A

Merger and takeover.

59
Q

What is a merger?

A

When two or more businesses agree to join together to form one larger business.

60
Q

What is a takeover?

A

When one business buys control of another.

61
Q

What is a hostile takeover?

A

When a business takes over your business when you don’t want them to.

62
Q

What are the three types of merger and takeover?

A
  • Horizontal.
  • Vertical.
  • Diversification.
63
Q

What is a horizontal merger/takeover?

A

When the two business that join together are the same type of business.

64
Q

What is a backwards vertical merger/takeover ?

A

When a business mergers or takes over a business that supplies their goods.

65
Q

What is a forward takeover/merger?

A

When a business merges/takes over the business it supplies to.

66
Q

What is diversification?

A

When the business mergers or takes over a business that is completely different to them.

Netra Business Gcse OCR 9-1 (6 decks)

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