Topic 1.4 Flashcards
What is a sole trader
A business that has just 1 owner
Pros and cons of being a sole trader
Pros:
Easy to set up
You get to be your own boss
You control 100% of the profit
Cons:
Might have to work long hours
Unincorporated
Unlimited liability
Harder to raise finance
Pros and cons of partnerships
Pros:
More ideas
Shared workload
More capital invested
Cons:
Legal responsibility for other partners
Unlimited liability
Disagreements
Shared profits
Who are limited companies owned by
Shareholders
Pros and cons of Ltds
Pros:
Limited liability
Easier to raise finance
Cons:
More expensive to set up
Slower to set up
Legally obliged to publish accounts (not publicly)
Pros and cons of PLCs
Pros:
Limited liability
Easier to raise finance
Cons:
More expensive to set up
Slower to set up
Legally obliged to publish accounts
What is franchising
Using the brand name or product of another business
Pros and cons of franchising
Pros:
Established brand name
Less risky
Training or management provided
Cons:
Can have limited rules to how the business is operated
Can have to pay the franchisor
What is the location of the business influenced by
Location of raw materials
Labour supply
Competition
Some firms consider
Location of the market
Using the internet
What is the marketing mix
How businesses make customers more likely to purchase their product(s)
What are the 4P’s in the marketing mix
Product
Price
Placement
Promotion
Which things can influence the marketing mix
Technology
Customer needs
Competition
What do small businesses have to be with their marketing mix
Careful as they have limited sources of finance and it can be expensive
What is a business plan
Outline of what a business will do and how they’re going to achieve it
How can business plans be useful
Help with getting loans
Reduce risks
Even let the owners know its a bad idea before it gets too deep
