Topics Flashcards
Define profit
Remaining money after costs been paid
Define unlimited liability
If business is in debt owner must pay the bills off. If failed personal assets may be seized
Define limited liability
Owner cannot loose more than has been invested
List business owner types
Sole trader , partnership , private limited company (LTD), franchise , public limited company (plc)
List sole trader features
1 owner.
Can employ people who will have no ownership over business.
Must pay tax.
Unlimited liability.
List Partnership features
2-20 partners.
Joint ownership of business.
Unlimited liability.
Decide themselves or employ manager.
Shared profit.
List ltd features
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
Describe franchise features
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.
Describe features of plc
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
4 p’s
Promotion, price , place , product
Short term finance is used..
To help businesses to maintain a positive cash flow.
Cash flow
Movement of money coming in and oit of business
Overdraft is…
Organized by a bank - short term lending of smaller amounts of money
Trade credit is
A source of finance allowing businesses
To obtain raw materials + stock but pay at later date.
Long term sources of finance is
Source that does not cost the business as there are no interests to pay back.
Venture capital
Take on high risk business ideas
Owners may have to give up large share
Bank loan
Money lent to individual or business, paid off with intersst over time.
Retained profits
When business makes profit, jt can leave some / all money in the business and reinvest in order to expand
Crowd funding
Involves large amount of people investing small amounts of money to business
How to add value to design
Unique selling point (usp), desigjn, quality, convenience. Branding.
Market segment is
A identifiable group of individuals or part of matket consumers share characteristics or needs
Segmentation by location
Business may decide to sell in just one country or region (can be smaller area)
Identifying gaps in the market
Area where there is demand for product or service thats not met
Methods of market research
Collecting nre data info that has not been collected before.
Custimized research
Basic needs
Food , clothing , shelter
