Topics

Question 1

Define profit

Answer 1

Remaining money after costs been paid

Question 2

Define unlimited liability

Answer 2

If business is in debt owner must pay the bills off. If failed personal assets may be seized

Question 3

Define limited liability

Answer 3

Owner cannot loose more than has been invested

Question 4

List business owner types

Answer 4

Sole trader , partnership , private limited company (LTD), franchise , public limited company (plc)

Question 5

List sole trader features

Answer 5

1 owner.
Can employ people who will have no ownership over business.
Must pay tax.
Unlimited liability.

Question 6

List Partnership features

Answer 6

2-20 partners.
Joint ownership of business.
Unlimited liability.
Decide themselves or employ manager.
Shared profit.

Question 7

List ltd features

Answer 7

Made up of people who know each other.
Friends + family can buy shares in business (making them part owners ).
Shares cannot be bought by public.
Owners control who buy shares.
Expand by selling more shares , giving the business more capital.
Limited liability
Normally medium sized business

Question 8

Describe franchise features

Answer 8

Franchisor is the original owner
Franchisee is the individual who purchases the business model.
Already made business model.
Initial set up fee .
A percent of sales turn over is paid annually croyalty.

Question 9

Describe features of plc

Answer 9

Growing business may decide as it gets larger to float shares on stock exchange to raise funds.
Large business
Have to own at least 51% of business to stay in charge

Question 10

4 p’s

Answer 10

Promotion, price , place , product

Question 11

Short term finance is used..

Answer 11

To help businesses to maintain a positive cash flow.

Question 12

Cash flow

Answer 12

Movement of money coming in and oit of business

Question 13

Overdraft is…

Answer 13

Organized by a bank - short term lending of smaller amounts of money

Question 14

Trade credit is

Answer 14

A source of finance allowing businesses
To obtain raw materials + stock but pay at later date.

Question 15

Long term sources of finance is

Answer 15

Source that does not cost the business as there are no interests to pay back.

Question 16

Venture capital

Answer 16

Take on high risk business ideas
Owners may have to give up large share

Question 17

Bank loan

Answer 17

Money lent to individual or business, paid off with intersst over time.

Question 18

Retained profits

Answer 18

When business makes profit, jt can leave some / all money in the business and reinvest in order to expand

Question 19

Crowd funding

Answer 19

Involves large amount of people investing small amounts of money to business

Question 20

How to add value to design

Answer 20

Unique selling point (usp), desigjn, quality, convenience. Branding.

Question 21

Market segment is

Answer 21

A identifiable group of individuals or part of matket consumers share characteristics or needs

Question 22

Segmentation by location

Answer 22

Business may decide to sell in just one country or region (can be smaller area)

Question 23

Identifying gaps in the market

Answer 23

Area where there is demand for product or service thats not met

Question 24

Methods of market research

Answer 24

Collecting nre data info that has not been collected before.
Custimized research

Question 25

Basic needs

Answer 25

Food , clothing , shelter