Understanding business test Flashcards
What are Needs?
Needs are things humans cannot survive without basic needs and without them they may die. An example would be food and water.
What are wants?
Wants can never be fully satisfied as we do not need them to survive an example of these would be football boots.
What are goods?
Goods are tangible items we can hold , touch and feel such as cars and televisions.
what are services?
Services are performed for customer and include a haircut. Services as cosumed at the point of purchase and are used once. They are intangible
What is tangible?
Tangible products are things we can hold touch see and feel. such as phone and a jacket
what is intangible?
Items you cannot hold touch see and feel such as services
what is a durable good?
Durbale goods are products that are used reapteadly over time such as a cooker.
What is non durable goods?
Non durable goods are consumed almost immediately and mainly used only once for example a packet of sweets.
what is land?
All natural resources of the world
what is labour?
Human input
what is capital
money, tools, machinery and equipment.
What is enterprise
creative thinking and business know hows of the entrepreneur
What is an enterprenuer
A person who has a creative business idea and takes the initiative to turn it into a business.
What is the private sector?
Organsations set up and owned by private individuals main aim is to make a profit.
What is the public sector?
Set up by the government (national or local) main objective is to provide a equality service.
What is the third sector?
Set up by individuals in order to benefit a specific group main objective is to provide a service that the private and public sector does not.
What is a sole trader?
A sole trader is a business owned and run by a single person.
What are 3 advantages of a sole trader?
They are able to make all the business decisions. They get to keep all the profits and it is very easy to setp up.
what are 3 disadvantages of a sole trader?
The workload may be heavy. They have unlimited liability which means they can lose all their personal items to pay any debt if the business fails and it can be difficult to raise finance.
What is a partnership?
A partnership is a business owned and run by 2 or more people less than 20.
What are 3 advantages of a partnership?
The workload and responsibility is shared. Different partners bring different skills and experiences. Partners can share the financial burden for expenses.
What are 3 disadvantages of a partnership?
The profit must be split and they have unlimited liability. Partners may disagree about the business’s direction, management, or work-life balance
What is a private limited company?
A private limited company is business owned by of shareholder and run by a board of director. 2 -20 people.
What are 3 advantages of a private limited company?
They can raise capital easily by issuing shares. Limited liability meaning share holders only lose the money they put in. Directors and shareholders bring different skills and experiences
What are 3 disadvantage of a private limited company
Companies act must be followed. Costly to set up and every year financial statements must be prepared and published
What is a business plan?
A business plan is a document which outlines business objectives and how its going to meet them.
What is a benefit of having a business plan?
A benefit of having a business plan is it reduces the risk of the business failing as all aspectes have been researched and costed.
What does a business plan contain?
It contains informaton about business, marketing, human resources and finance.
What are four sources of finance?
Bank loans, leasing, bank overdraft and hire purchase.
What are the advantages and disadvantages of bank loans?
The advantages are they are relatively quick and easy to set up. repayments are in regular instalments. The disadvantages is that interest is paid on money borrowed.
What are the advantages and disadvantages of leasing .
No large initial payment. Never own the item
What are the advantages and disadvantages of bank overdraft.
Can be agreed in advance for many firms a permant facility. No repayment required. Interest rates can be high.
What are the advantages and disadvantages of hire purchase.
Fixed repayments help budgeting. The cost is spread making it easier to afford. Items are owned by hire purchase company till last installment is paid.
What is customer service and the features and benefits.
Treating customers in such a manner that they are satisfied with the service they have recieved. Two features is producing a quality product/ service and having a bright clean environment. Two benefits is increased profits and fewer complaints.
