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business > unit 1 > Flashcards

unit 1 Flashcards

1
Q

why do business exist

A

create employment (31.2 million people). 4% unemployed. pay income tax, claim less benefits able to purchase more goods (multiplier affect) creates economic growth

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2
Q

how do businesses help

A

pay corporation taxes meaning government can help schools and hospitals, create new products and enhance countries reputations for example France and wine

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3
Q

what do businesses do

A

provide goods and services such as physical (phones) and intangible (dental service)

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4
Q

wha are the four benefits of business to society

A

employment, pays taxes, create wealth, drive innovation to make new and developed things

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5
Q

what is an entrepreneur

A

person who sets up a business and takes financial risk

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6
Q

what is a start up

A

new business enterprise formed by entrepreneur

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7
Q

what is the role of an entrepreneur

A

spots opportunities, takes calculated risks, create growth and develop.

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8
Q

what is a calculated risk

A

research that has been done to take a risk and make company better

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9
Q

what does catalyst mean

A

think and develop and branch off multiple ideas

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10
Q

what is the transformation process

A

input turns into an out put

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11
Q

example of transformation process

A

wood turned into desk

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12
Q

CELL

A

capital, enterprise, land, labour

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13
Q

incorporated

A

legal difference between the business and owner

owners have limited liability

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14
Q

unincorporated

A

business is the owner

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15
Q

what is a small & medium sized enterprise

A

business with fewer then 250 employees

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16
Q

what percent of businesses are SMEs

A

99%

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17
Q

primary sectors

A

any business that grow goods or extracts materials from the land (mining, farming, energy extraction)

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18
Q

secondary sectors

A

take thee raw materials from the primary sector and turn them into finished goods (manufacturing, food, processing, component assembly)

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19
Q

tertiary sectors

A

providing services to consumer and businesses (personal services, retailing, household franchise, teaching)

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20
Q

quaternary sectors

A

providing information and ICT (software, financial services, data processing

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21
Q

what is B2C

A

business to consumer

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22
Q

what is a mission

A

statement of the business aims which describes the purpose of the organisation

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23
Q

what is a aim

A

a long term plan from which business objectives are derived

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24
Q

what is a business objective

A

the septic intended outcomes of business strategies

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25
Q

what are the main functions of objectives

A

clear statement of what needs to be achieved

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26
Q

what are the 4 functions of business

A

finance, opperations, marketing, HR

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27
Q

how can objectives be used

A

provide targets, reduce uncertainty, motivate employees

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28
Q

market capitalisation

A

the value of business

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29
Q

what a share

A

part ownership of a business

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30
Q

what is dividends

A

profit split between share holders

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31
Q

equation for reward of shares

A

div per share/share price x 100

32
Q

equation of market capitalisation

A

share price x umber of shares

33
Q

what is equity finance

A

finance from shares

34
Q

CESSPIT

A

cashflow
ethical
social
survival
profit
increase turnover

35
Q

cash flow

A

money coming in and out of the business

36
Q

ethical business

A

morally right (children in companies)

37
Q

social

A

benefit groups within society
(fair-trade, animal testing)

38
Q

survival

A

need to have finance and able to compete (60% companies fail)

39
Q

profit

A

financial gain after all costs have been cut from revenue

40
Q

increase turnover

A

know as growth - this causes more profit and power but can also lead to failure

41
Q

SMART objectives

A

specific
measurable
achievable
relevant
time bound

42
Q

what does smart help with

A

helps management set effective objectives

43
Q

specific

A

state would should be achieved

44
Q

measurable

A

possible to determine wether it has been achieved

45
Q

achievable

A

objective should be realistic given the circumstances in which it is set

46
Q

relevat

A

objectives relevant to people responsible for achieving them

47
Q

time bound

A

objectives set with time frame

48
Q

what is finance needed for

A

business set-up
day to day training
growth and development

49
Q

what personal source of finance is used by entrepreneurs

A

inheritance
cash + investment

50
Q

internal sources

A

retained profits
working capital

50
Q

why are personal sources important to a start up

A

cheap
keep more control over business

51
Q

external sources

A

issue shares
bank loan

52
Q

benefits of retained profits

A

cheap
flexible
don’t dilute company

53
Q

downsides of retained profits

A

shareholders might prefer dividends
high profits could show debt

54
Q

what are bank loans

A

longterm finance
interested fixed or variable
start up provide security for the loan

55
Q

what are bank overdrafts

A

short-term finance
higher interest rates
easier to short

56
Q

what can influence business objectives

A

competition
market conditions
size and legal status
social attitudes

57
Q

types of strategic objectives

A

focused on long term
stretching and challenging
higher risk
hard to change

58
Q

types of tactical objectives

A

focused on short term
low risk
realistic and achievable
easy to change

59
Q

PESTLE

A

political
economic
social
technological
legal
environmental

60
Q

market conditions

A

features of markets
level of sales
sales growth
levels of rivals

61
Q

demand

A

amount of good and services that are affordable to buy
good to see how desirable the market is

62
Q

income levels

A

will have an impact on the demand for all goods

63
Q

what does inferior goods mean

A

when the demand for goods fall as consumers income rises

64
Q

what happens when income levels rise

A

normal and luxury goods sales will rise

65
Q

what are interest rates

A

the costs of borrowing money and the return for lending it

66
Q

how will high interest rates affect consumers

A

people with loans have less disposable income
saving becomes attractive
the fall in demand for consumer and capital goods will slow down economic growth

67
Q

what are demographic factors

A

age/gender/ethnicity/location

68
Q

problems with businesses becoming environmentally friendly

A

becomes much more expensive
change in products (plastic bags)

69
Q

what is fair trade about

A

ethical
better pay for suppliers
better working conditions
items more expensive

70
Q

example of businesses using environmental changes to an advantage

A

M&S
saved £135 million

71
Q

example of businesses that have gone against environmental improvement

A

BP
fined $18 for oil spillage
dumped in sea

72
Q

companies challenged against environmental issues

A

lego
lots of plastic

73
Q

how did lego improve environmental challenges

A

joined WWF
decrease of 10% in energy use
using renewable energy for all factories (wind turbine)
using sustainable resources for packaging and plastic

74
Q

arguments against firms turning environmentally friendly

A

can change prices, so consumer prices go up
change in producing product
can’t make it efficiently due to restrictions
reduce international competition

75
Q

what is green washing.

A

making people think your company is. more environmentally friendly then it accurately is

business (14 decks)

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