understanding business Flashcards
explain the Four Factors of production
capital - money tools and equipment invested into the business
enterprise - the idea behind the business
land - the natural ressources a business will use
labour - the employees of the business
explain the sectors of industry
Primary sector – involves extractions raw materials from the environment
secondary sector - involves manufacturing products
tertiary sector - involves any business which provides a service 
what are private sector organisations
- owned by private individuals
- controlled by the owners or a board of directors
- funded through personal investments
what are sole trades
- A sole trader is a business that is owned and controlled by one person.
- unlimited liability = Legally responsible for paying debts of the business

advantages of a sole trader
- easy to set up
- do not need to discuss on decisions
- owners keep all profit
disadvantage of a sole trader
- owner has no one to share ideas with
- will find it difficult to take time off
- owner has unlimited liability
explain what. partnership is
- Business that has between 2 to 20 owners
- Found in professional practices 
advantages of partnership
-Partners can bring skills and experiences to the business
- Workload can be shared between partners
- Large amounts of finance can be raised
disadvantage of partnership
- Disagreements and arguments can occur
- Profits have to be shared between partners
- Partners have unlimited liability
What is a private limited company
- The ownership is divided into shares
- The owners are known as shareholders
- Limited liability = Shareholders are not legally responsible for paying debts
- Controlled by a board of directors
-Those invited can purchase shares so the business it’s not a risk loosing to outsiders
advantages of a LTD
- Selling shares causing the business to raise a large amount of capital
-Control of the company cannot be lost outsiders - Shareholders have limited liability
disadvantage of LTD
- Setting up a LTD is complicated and lengthy
- Annual accounts must be produced and shared publicly
- Profits have to be shared between shareholders
Public sector organisations are
- Owned by the government
- Controlled by elected officials such as counsellors
- Funded through taxes
Third sector organisations are
- Not owned anyone
- Controlled by a board of trustees
- Funded through donations
Nonprofit making organisation
A charity is an organisation that has been set up to a help particular cause.
They will use donations and money raised from fundraising activities to help
Social enterprise
Social enterprise Primarily have a social or environmental aim.
- apply for grants and funding only available to social enterprises
- they might charge a high price for their products as customers will be willing to pay more as they know the money is raised to help a good cause
- they will find it easier to attract high-quality staff who want to work for an organisation and make a difference to society
methods of maximising customer satisfaction
- Provide training to all staff to ensure all staff know what to to
- Gathering customer feedback using surveys and comment cards to improve in areas poorly rated by customers
- Reviewing customer complaints to ensure That all
complaints are handled consistently and efficiently - Excellent after sales services such as extended warranties and generous return policies
-Keeping stuff motivated so they will go out of their way to help customers - Hiring helpful and polite staff with appropriate skills
benefits of good customer service
- Customers will buy from the business again
- Customers will become loyal to the business
- Image and reputation will improve which will attract more customers - Happy customers will recommend the business
- fewer unhappy customers will result in fewer complaints
- The business will experience an increase in sales and profit

internal factors of finance (lack of finance)
- The business will be unable to pay its bills
- Raw materials which can lead in a halt in production
- Take on more stuff
- Grow the business
- Carry out marketing activities
internal factors in human recourses
Human resources refers to all employees in a workplace
- Human resources can provide good customer service to a customer which can result in customers coming back. They may also provide poor customer service therefore customers might not recommend the business
- If human resources are unhappy with there pay/ pension etc they may undertake industrial action such as strike This is when employees stop working with the organisation , this can stop production

internal factors in currency technology
Current technology is technology the business is currently using
If the businesses using out of date technology this can lead to; 
- Money is spent fixing a technology which can use elsewhere
- Productivity slower which can delay customer orders
- Production we have to stop of machinery breaks down
-Staff may get frustrated working with out of date softwares

what is stakeholders
Stakeholder is an individual, group or organisation that has an interest in the success of a business
-stakeholder interest Means what stakeholders want from the business
- stakeholder influence means the actions that stakeholders take which impact positively or negatively on the business.
- We can be internal or external. Internal stakeholders or doors within the business external stakeholders are those individual, groups or organisations out with the business
internal stakeholder owners /shareholders
Owners/shareholders- The main interest of owners and shareholders is to make a good return on the money that they have invested into the business they want the business to make a good level of profit as they will receive more of that profit themselves
They can influence the business by increasing or decreasing the amount of capital that they invest into business they will be involved in key decision-making the quality of these decisions will impact on the success of the business

stakeholder employees
The main interest of an employee or to receive a good rate of pay and for the business to provide good working conditions they will also want a job security
Employees can influence the business to their level of productivity and the quality of the service that they will provide to customers .both are linked to the levels of motivation of employees .employees can take industrial action such as strikes
