Understanding Business Flashcards
What is a Sole Trader?
A Sole Trader is a type of private sector organisation. They’re usually small businesses and are a popular choice when first setting up one. The singular sole trader will use their own money when setting up the business
Sole Trader - Advantages
Easy and simple to set up.
All profits are kept by the owner.
Owner can chose when to work and take holidays.
Owner makes all decisions.
Sole Trader - Disadvantages
Nobody to share workload with.
raising large amounts of start up capital can be difficult as a sole trader might be seen as a risk.
Can be difficult to get discounts when bulk buying.
UNLIMITED LIABILITY.
What is the difference between Needs and Wants
Needs are things that are essential to survival eg water and food
Whilst wants are things that would be nice to have but aren’t necessary.
What are the 4 factors of production?
Land
Labour
Capital - Money
Enterprise
Name and Describe the 3 sectors of industry
Primary - Businesses in this sector take raw materials form the earth eg agriculture
Secondary - Businesses in this sector use raw materials and make something with them eg Car manufacturers.
Tertiary - Businesses in this sector provide a service eg a hotel or supermarket
What is a partnership
A partnership is a private sector business with 2-20 partners who control and own the business together
What is an LTD?
LTD’s are a private sector organisation who are owned by shareholders but run by a board of directors.
What is dividend?
It’s the return on money invested that shareholder for an LTD get.
What is a Franchise?
A Franchise is a Business agreement that allows the use of a brand name and to sell their products or services
What is the Public Sector?
Organisations that are owned by the state and controlled by the government.
What is the main aim for public sector organisation?
To provide a service to the public and stay within a budget.
What are the needs of customers?
Good quality products
Pleasant and helpful staff
Good Prices
Durability
Easily available
Why is customer satisfaction important?
Increase profits
Increase sales revenue
Gain a good reputation
Increase market share
Attract better employees
What are some key business objectives?
Sales Maximisation
Customer Satisfaction
Growth
Survival
Social Responsibility
Profit Maximisation
Provide a service
Market share and Enterprise
Managerial Objectives
What is the acronym commonly used with external factors?
PESTEC
What are the 6 external factors?
Political
Economic
Social
Technological
Environmental
Competitive
What are the 5 internal factors?
Finance
HR/Staff
Management
Information
Technological
What are Stakeholders?
Stakeholders are people who have an interest in an organisation and they can influence and organisation in a number of ways
