unit 1 - business activity Flashcards
give 4 characteristics of an entrepreneur
confidence, determination, risk-taking, creative
2 risks of being an entrepreneur
financial risk, risk of health / strained relationships
why do business make a business plan?
reduce the risk of failure, be as successful as possible
what are the 4 P’s
price, product, place, promotion
what is a business plan?
a plan that sets out details of the product or service being sold, marketing, market research ect
characteristics of a business plan
identity the market, identity resources, aims and objectives
partnership is…
a business owned by more than 1 person
unlimited liability is…
owners personal possessions can be taken if they run out of money / go in debt
a deed of partnership is…
a document stating who owns the partnership, how much money each partner has invested and their role in the business
a private limited company (ltd) is..
it can sell shares to invited people only
a public limited company (plc) can..
can sell shares to anyone who wants to buy them
define finance…
the money used to start up or expand a business
why might a ltd company be suitable for someone?
suitable for start ups and established businesses wanting to grow that:
need larger amounts of finance
have an increased or high financial risk
have owners who wish to keep control of the business
how might a plc company be suitable for a business?
suitable for an established business that:
wishes to grow
needs very large amounts of finance
has a very high financial risk
how might a partnership be suitable for a business?
suitable for start ups or established businesses that want to grow that:
need larger amounts of finance ( than sole traders )
have a fairly low financial risk
need a wider range of skills
have owners who want to keep control of the business 🌟
how might a sole trader be suitable for a business?
suitable for start ups that:
only need a small amount of finance
usually have a low financial risk
required limited or non specialist skills
what are external stakeholders?
the local community, suppliers, customers and government
what are internal stakeholders?
the business owners and the people who work in the business
what are stakeholders
anyone who has an interest in the business
what is organic growth?
internal growth of a business, for example by increasing its sales, gaining new customers ect.
what is external growth?
the growth of a business by takeover or merger
what is backwards vertical growth?
when a business merges with or takes over a business that supplies it with goods or services
what is horizontal growth?
a merge or takeover where the two businesses are involved in a similar operation
what is forward vertical growth?
when a business merges or takes over a business that it supplies goods or services to.
define takeover
where a business takes a controlling interest in another business eg buying 50% of shares
define diversification
when a business takes over or merges with another business with which it has no connection
