Understanding Business Flashcards
Sectors of the economy
Private, public, third sector
What are the key objectives of a business?
To make a profit and keep customers satisfied
Explain the objectives of a private sector business and who are in it?
It’s is made up of individuals working by the self as well as a single person working to make a profit
Explain the pulpit sector objectives and who are in it?
The public sector is made up of organisations set up by the government to provide services to the public like the NHS
Explain the third sectors objectives and who is in it?
This is made up of charities and voluntary groups, that provide service that the public and private sector do not
What is a sole trader?
Is when one person owns a business
Describe the advantages of being a sole trader?
Make a decisions
Keep all profits
Doesn’t have to answer to anyone
Describe the disadvantages of being a sole trader
Can be stressful
Unlimited liability is hard to raise finance
What is a partnership?
When 2-20 people own a business
What are the advantages of being a partnership?
Share responsibilities and work load
Less stressful
People have different knowledge and experiences and can share it
What is the disadvantages of a partnership?
Has to share profits
Can have disagreements
Had unlimited liability
What is a private limited company?
Is a business organisation owned by shareholders
A private limited company has?
Limited liability - shareholders only lose the money they have invested in the business
What are the advantages of a private limited company
Owned by more than one person so share knowledge and responsibility
What is the third sector objectives?
To relieve poverty
To advance education
To advance religion
What is the business cycle?
Consumers have needed and wants
Businesses find out needs and wants by carrying out market research
They then produce goods and services
What are the factors of production?
CELL
Capital?
This is the machinery used to make the goods and services
Like- tools and machinery
Enterprise?
This is the entrepreneur that spots a gap in the market and makes goods and services to cover it the develop ideas
Land?
The natural resources to produce the goods and services
Like - oil, fish etc
Labour?
This is the human resources, the employees to help produce the goods and services
Why is customer satisfaction so important to a business?
Because if the customers are treated well the are more likely to revisit the business again.
Recommend it too people
Won’t make complaints
What are things that upset customers?
Talking to a employee who doesn’t know what they are doing
What should a businesses do to make sure there customers will be happy with there purchase?
Develop a customer complaints procedure so they can fix the problem ASAP
What happens if customers are loyal to a business?
They will help make the business more profitable
What is the purpose of the customer care strategy?
To tell customers what the business promises
5 steps that ensure customer satisfaction?
Train employees
High quality goods and services
Delivery on time
Good customer support
What is internal factors?
Factors that a business have control over
What is external factors?
Factors the business doesn’t not have control over
Internal and external factors impacting a business are?
P- political E- environmental S- social T- technology C- competitors
How does the political factors impact the business and what factor are they?
This is a external factor
Business have to abide by laws, and they have to pay taxes this can effect the money they make
Environmental factors?
This is a external factor
This is natural things that happen within the earth that can effect a business like weather natural disasters
Social factors?
This is a external factor
This is when a business has to adapt to society so they can survive
If people are much more aware of echo issues businesses may make use recyclable materials
Technology factors?
This is a internal factor
This is they technology used within a business
It can impact a business by replacing employees
Economic factors?
This is how the world is doing,
The levels or employment meaning less demand for their products
This will lead to lower sales and profits
If there is a boom or recession
Exchange rates
Competition factor?
Most business will have competition on the market.
This will effect sales as competition might be better
Introduce special offers to out smart competition
Businesses will make sure they encourage customer to buy from them not competition
What is a boom?
This is when the economy grows rapidly
Most businesses start to have a increase with profits and develop new products because people can afford them
A recession is?
When the economy declines
Unemployment increases
People have less money to spend and this effects businesses because they are not spending money in there business
What are stakeholders?
These are people or groups who have a influence or interest in a business
What is the effect of finance on a businesses
The amount of money a business has can effect there objectives and if they can meet there goals
Human resources bring to the business?
New knowledge and ability and skills
Owners have what influences and interests In a business?
This Is internal
Influence - make decisions for the business, can invest money or take out money of the business
Interest- share of profits
Shareholders interest and influences on a business are?
This is internal
Influences - can protest against decisions made by the making director
Interest the share of the profit made
What are the influence and the interest of employees?
This is internal
Influence - can leave, take industrial action (strike)
Interests - good pay and good working conditions
What are banks influences and interest in a business?
This is external
Influence - can provide loans, interest rates
Interest - can repay them back
Customers influences and interest in a business are?
This is external
Influences - decide to buy or not, can complain
Interests - wants high quality goods and services at low cost
What is the influences that a government has on a business?
This is external
Influences - can vary tax rates and introduce new laws
Interest - wants the business to be legal
