U1AOS3 Flashcards
What are natural resources?
Resources that occur naturally eg. trees, wide open spaces
What are labour resources?
People who work for a business
What are capital resources?
Resources that aren’t natural or people and have monetary value.
What are three things that should be taken into account when picking a location?
- cost
- proximity to market
- access to inputs
What does SWOT stand for?
Strengths, weaknesses, opportunities and threats
Benefits in a new franchise?
Marketing, training and operations
Benefits in a new independent business?
Control, profit and expansion
What are operations?
They are responsible for the core function of the business.
What is a sole trader?
A sole trader is one person who runs and owns a business. Simple and inexpensive to set up + full control but unlimited liability and heavy burden.
What is a partnership?
A business run by two or more people. Generally, numbers don’t go past 20 people. Inexpensive + workload and debt sharing. However, profit is shared, unlimited liability and disagreements.
What is a private listed company?
A company that is owned by private shareholders which are not available to the public. Limited liability and separate legal entity. However, more expensive and hard to set up and government reporting requirements.
What is a public listed company?
A company where the shares of a business can be purchased and sold on an open market. Limited liability and separate legal entity. However, high costs and the possibility of loss of control.
What are some examples of business support services?
- processing of purchase orders and fulfilment services
- tracking of delivery schedules
- managing logistics
- customer relationship management services
- accounting and processing of transactions
- assistance for marketing
What’s one aspect of a business that could never be fulfilled by a support service?
OPERATIONS
What is debt finance?
Money from an external lender such as a bank
What is equity finance?
Money sourced internally such as from friends or selling capital resources.
What are some examples of debt finance?
- bank
- a friend lending money that is to be paid back
What are some examples of equity finance?
- self-finance
- grants from government
- partnership with friends or family
What is a business plan?
A business plan is a document that outlines the current operations and operating procedures in the business and sets goals for future growth, expansion and success.
What are brick and mortar stores?
- a normal store
- stores at a market
- physical store
Different types of online stores?
- advertising model eg facebook
- affiliates model ( generates income from people clicking on ads)
- brokerage model eg eBay
- merchant model (business making direct sales via website)
- subscription model
- information model eg iTunes
- community model (sometimes asks for donations)
Advantages for online stores?
- easy
- instantaneous
- costs are less
- expansion is easy
Advantages for offline stores?
- face to face customer reaction
- customers can see/touch/try products easily
- physical presence builds trust
