unit 1 Flashcards
name short term sources of finance
= payback within a year
- overdraft
- trade credit
- factoring
name long term sources of finance
=payback over a year
- loan
- share capital
- mortgage
- grants
- hire purchase / leasing
- debentures
qualities needed to be an entrepreneur (enterprise)
decision maker
willingness to take risks
undergo new ventures
use initiative
define franchise, franchisor, franchisee and franchising
-franchise
a business that sells branded products of another business under licence
-franchisor
business that SELLS franchise for royalty fee or money
-franchisee
buys into the business
-franchising
right given to another business too sell goods under its name
positives and negatives with franchise
positives help / guidance / support known brand more likely to succeed training
negatives
pay start fee
lack of freedom
buy from franchisor (high costs maybe)
what is a sole trader
the single owner of an unlimited business
what are variable costs and examples
costs that change with the output
- packaging
- advertisement
- ingredients
what are fixed costs and examples
costs that do not change with output
- rent
- gas / heating / electricity
- commodities (raw materials)
difference between limited and unlimited
unlimited = no distinction between what the business owns and what the owner owns
limited = shareholders are not liable for the debts of the company, the most they can loose is the value of their shares
how do u increase profit
cut costs
increase prices
increase amount sold
market segment
people with similar buying habbits in the same market
product range
group of similar products made by a business
whats the difference between creative thinking and lateral thinking
creative = coming up with new and unique ideas
lateral = thinking differently to try and find new / unexpected ideas
patent
ownership of an invention
copyright
ownership of material e.g. books
trademarks
ownership of sign / product or business feature / symbol
sales volume
number of output (goods/services) sold in a time frame
loss
cost > revenues
cumulative cash flow
cash flow in an amount of time
trade credit
paying suppliers over time
share
part owner ship in a business
share capital
monetary value of a company that belongs to its shareholders
share holders
owners of a company
stake holders
person with interest or concerns in a business
difference between overdraft and loan
overdraft = paying back money thatbyou have borrowed from a bank with interest.
short term
loan = borrowing a sum of money that as to be paid over a fixed amount of time (usually over a year).
long term
income tax
tax on income paid by WORKERS and SOLE TRADERS. sole traders pay it on net earnings
national insurance contributions
tax on earnings of WORKERS
co operation tax
tax on profit of LIMITED COMPANIES
demand
the amount of product/service that customers are willing and able to buy at any given price
supply
the amount of product suppliers are willing to or are able to sell for at any given price
difference between surplus and shortage
surplus = supply > demand shortage = demand > supply
interest rate
cost of borrowing
reward of saving
exchange rate
value of currency expressed in another
