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Business > Unit 1 business in the real world (mock) > Flashcards

Unit 1 business in the real world (mock) Flashcards

1
Q

Land

A

All of the earths natural resources (renewable and non renewable) there is not enough supply to satisfy the demand

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2
Q

Labour

A

Work done by the people who contribute to the production process

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3
Q

Capital

A

The equipment, factories and schools that help to produce goods or services

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4
Q

Enterprise

A

Refers to the people (entrepreneurs) who take risks and create things from the other three factors of production (land, labour and capital)

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5
Q

Goods

A

Physical items like books or furniture

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6
Q

Services

A

Are actions preformed by other people to help the customer e.g hairdresser

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7
Q

Primary sector

A

Produces raw materials from natural resources which are used to make goods

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8
Q

Secondary sector

A

Manufactures goods, they turn raw materials into finished goods e.g. a chocolate factory turns cocoa and milk into chocolate

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9
Q

Tertiary sector

A

Provides services e.g haircuts

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10
Q

Why someone would want to become an entrepreneur

A
  • Financial reasons
  • They have found a gap in the market for a new product
  • might want the independence of being your own boss
  • some people may be dissatisfied with their current job
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11
Q

Characteristics of an entrepreneur

A
  • Innovative (good at spotting opportunities and problems)
  • risk taker
  • hard working
  • determined
  • organised
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12
Q

Opportunity costs

A

Sacrifice we make every time we do something e.g. if you go out for dinner you won’t be able to do homework

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13
Q

Entrepreneur

A

A person who starts up their own business

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14
Q

Sole trader

A

Have just one owner, most small business are sole traders e.g hairdresser

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15
Q

Sole trader advantages

A
  • easy to set up
  • you are your own boss
  • you alone decide what happens to any profit
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16
Q

Sole trader disadvantages

A
  • you might have to work long hours
  • if the business gets sued you are responsible
  • it can be hard to make money to start it up
  • limited liability
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17
Q

Partnership

A

A business that has two or more owners e.g. Ben and Jerry’s

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18
Q

Partnership advantages

A
  • more ideas
  • greater range of skills
  • more people to share work so less working hours
  • more money can be put into the business
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19
Q

Partnership disadvantages

A
  • Each partner is legally responsible for what the other partner does
  • you can disagree
  • Profits are shared
  • unlimited liability
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20
Q

Private limited companies (ltd)

A

Companies owned by a group of shareholders and run by directors, shares can only be sold privately e.g. Apple

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21
Q

Ltd advantages

A
  • It is easier to get a mortgage than it is if you are a sole trader or partnership
  • owners have lots of control
  • has limited liability
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22
Q

Ltd disadvantages

A
  • More expensive to set up than partnerships because of all the legal paperwork
  • the company is legally obligated to publish its accounts every year
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23
Q

Limited liability

A

If you are in debt, the shareholders are legally responsible to pay

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24
Q

Unlimited liability

A

If you are in debt you are responsible to pay it, your personal possessions are at risk if you can’t pay

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25
Q

Public limited company (plc)

A

The company shares are traded on the stock exchange, and can be bought and sold by anyone

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26
Q

Plc advantages

A
  • Much more capital can be raised by a plc than by any other kind of business
  • have limited liability
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27
Q

Plc disadvantages

A
  • it is hard to get lots of shareholders to agree
  • each shareholder has very little say
  • it is easy for someone to buy enough shares to takeover the company
  • the accounts have to be made public
  • more people to share profits with
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28
Q

Types of business aims

A 
Survival, 
growth, 
maximise profit,
increase shareholder value, 
increase market share,
Do what’s right socially and ethically,
Achieve customer satisfaction
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29
Q

What is a business aim

A

Overall goals that they want to achieve

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30
Q

Business objectives

A

Objectives are more specific than aims, they are measurable steps on the way to the aim e.g. sell 30 products in a week

They also can see if they are being successful

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31
Q

Different factors that effect objectives

A
  • Size of business
  • level of competition
  • type of business
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32
Q

Not-for-profit

A

Don’t try to make a profit, they need to make enough income to cover their costs many of the not for profit companies are charities they are hard to set up because there are lots of rules

33
Q

Stakeholder

A

Anyone who is affected by a business.

34
Q

Owner (stakeholder)

A

The most important stakeholder. They make profit if the business is successful and decide what happens to the business

35
Q

Local community (steakholders)

A

The local community where the business is based will suffer if the firm causes lots of noise or pollution. They may gain if the company provides good jobs and sponsors local activities

36
Q

Customers (steakholders)

A

Customers want high quality products at low prices. They benefit when objectives are based on customer satisfaction

37
Q

Internal Steakholders

A

Are groups within a business e.g. owners and workers

38
Q

External stakeholders

A

Are groups outside of the business e.g. the community

39
Q

Employees stakeholder objectives

A
  • Higher earnings
  • job security
  • discounts
40
Q

Owners/shareholders stakeholder objectives

A
  • higher profit
  • expand the business
  • dividends
  • growth
41
Q

Local community stakeholder objectives

A
  • environmentally friendly

- local jobs

42
Q

Government stakeholder objectives

A
  • tax
  • legal behaviour
  • growth
43
Q

Suppliers stakeholder objectives

A
  • payed on time

- kept informed

44
Q

Customers stakeholder objectives

A
  • good products

- good service

45
Q

Negotiation

A

Negotiations occur when two sides discuss what they want and try to reach a conclusion. E.g.Employees may negotiate for a better pay. Suppliers may demand better terms and conditions.

46
Q

Direct action

A

Customers can stop buying a product off of a business if they are unhappy with their behaviour. Employees can strike

47
Q

Refusal to co-operate

A

Local councils can refuse to co-operate with a business if they do not like its behaviour, for example, they could refuse planning permission

48
Q

Voting

A

The owners of a business can make their views clear and can vote on what the organisation should do next

49
Q

Location

A

Where a business is geographically situated

50
Q

Why is location important

A
  • Costs(rent)
  • sales
  • image
51
Q

Factors affecting business location

A
  • competitors
  • costs
  • type of business
  • transport links
52
Q

Export

A

Goods and services sold overseas to consumers and business

53
Q

Proximity

A

The distance from the customer

54
Q

Tariff

A

A tax on foreign goods imported into the country

55
Q

Protectionist measures

A

Policies That government use to protect their own business against foreign competitors

56
Q

Imports

A

Goods and services purchased from overseas by consumers and businesses

57
Q

Quota

A

Limit on the number of foreign goods imported into the country

58
Q

Advantages of locating overseas

A
  • cheaper land
  • cheaper labour
  • learn another language
  • higher profits
59
Q

Disadvantages of locating overseas

A
  • language barrier
  • have to trust employees
  • travelling
  • complex legal structures
  • higher tax
60
Q

Business plan

A

A document that states what a business is trying to achieve and how they intend to do it

61
Q

Business plan is created to

A
  • help set up a business successfully
  • raise finance
  • set objectives
  • co-ordinate actions
62
Q

Main sections of a business plan

A
  • objectives of the business
  • details of prices and expected sales
  • analysis of the financial position of business
  • analysis of market
63
Q

Business plan disadvantages

A
  • time consuming
  • money consuming
  • may stick too tightly to the plan
  • might be too optimistic when writing it
64
Q

Business plan advantages

A
  • convinces financial backers(banks)
  • help the owner solve problems
  • helps make aims and objectives
65
Q

Revenue

A

The income that a firm receives from selling its goods or services. Can also be referred to as ‘turnover’

66
Q

Total costs

A

Fixed costs + variable costs

67
Q

Fixed costs

A

The costs that do not change when a business changes its outputs

68
Q

Variable costs

A

The costs that vary directly with the business output

69
Q

Expanding a business

A

The increase in the size of status of the business

70
Q

Reasons business want to expand

A
  • increases in market share

- cost savings

71
Q

Reasons a business will not want to expand

A
  • to keep control
  • offer personal service
  • avoid risk
  • avoid stress
72
Q

Ways a business measures itself

A
  • value of sales
  • value of the business
  • number of employees
73
Q

Internal growth

A

Expansion from within the business e.g: open up more stores

74
Q

External growth

A

Expansion involving another business e.g: merge with another business

75
Q

Advantages of internal growth

A
  • easier to manage and control
  • less risk
  • cheaper
76
Q

Internal growth disadvantages

A
  • slow

- market share could fall

77
Q

External growth advantages

A
  • benefit from other business’s expertise

- quick

78
Q

External growth disadvantages

A
  • can be hard to integrate both business
  • expensive
  • can cause redundancy
79
Q

Franchising

A

When one business sells the right to another business to use its name and sell its products

Business (7 decks)

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