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Business > Unit 1- Business in the real world (Paper 1 & 2) > Flashcards

Unit 1- Business in the real world (Paper 1 & 2) Flashcards

1
Q

3 reasons for starting a business

A

Making profit, benefiting others, gap in the market

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2
Q

Primary business

A

Produces raw materials extracted from nature

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3
Q

Secondary business

A

Manufacture goods from raw materials into finished goods. Also includes construction

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4
Q

Tertiary business

A

Provide services. Also involved in distribution process

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5
Q

Name 4 factors of production

A

Land, labour, capital, enterprise

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6
Q

Describe land (f of p)

A

Land where business is based, natural resources on that land

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7
Q

Describe labour (f of p)

A

All people work in the business

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8
Q

Describe capital (f of p)

A

Buildings and machinery needed by business

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9
Q

Describe enterprise (f of p)

A

Entrepreneurs who set up the businesses, organise factors of production and take risks

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10
Q

What is an entrepreneur?

A

Someone who takes a calculated risk through starting a business

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11
Q

2 financial reasons for starting a business

A

Making profit, investing money

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12
Q

3 non-financial reasons for starting a business

A

Work-life balance, skills and interest, being their own business

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13
Q

8 words to describe a good entrepreneur

A

Innovative, risk-taker, hard working, organised, determined, persuasive, leadership, teamworker

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14
Q

4 advantages of sole trader

A

Quick and easy to set up, simple to run, keep all profits, quick decision making

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15
Q

4 disadvantages of sole trader

A

Unlimited liability, harder to raise finance, limited time off, stressful

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16
Q

4 advantages of partnership

A

Quite simple for 2-20 people to set up, bring more knowledge and skills, jobs shared so less stressful, easier to raise finance

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17
Q

4 disadvantages of partnership

A

Unlimited liability, profits have to be shared, decision making takes longer, short life- if partner leaves

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18
Q

What’s in a deed of partnership?

A

How profits are shared, how much each partner invests, how decisions are taken, what happens if a partner leaves

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19
Q

4 examples of an Ltd

A

Iceland, Virgin, John Lewis, Clark’s

20
Q

Who are shares available to in an Ltd?

A

Friends and family

21
Q

3 advantages of an Ltd

A

Limited liability, easier to raise finance, stable form of structure

22
Q

3 disadvantages of an Ltd

A

Shareholders have to agree how profits are distributed, greater costs, less privacy

23
Q

4 examples of a PLC

A

BP, Boots, Barclays, Marks and Spencer

24
Q

Who are shares available to in a PLC?

A

The stock market

25
Q

3 advantages of PLC

A

Limited liability, can raise large sums of finance, stable form of structure

26
Q

3 disadvantages of PLC

A

Public can see information, risk of being taken over, separation of ownership and control

27
Q

6 possible aims for a business

A

Survival, profit/sales maximisation, share value, quality, growth, social responsibilities

28
Q

4 roles of objectives

A

Direction, focus for employees, allows planning, measurement of success

29
Q

Name 7 stakeholders

A

Customers, employees, managers, suppliers, local community, government, shareholders

30
Q

What are managers and employees mainly interested in?

A

Pay, job security, promotion, job satisfaction, success of business

31
Q

What are shareholders mainly interested in?

A

High profits, success and growth, proper running of business

32
Q

What is the government most interested in?

A

Payment of taxes, creating jobs, compliance with legislation

33
Q

What are suppliers most interested in?

A

Fair or high prices, profitable and continuous trade, financial stability

34
Q

What are customers most interested in?

A

Value for money, quality meets need

35
Q

What is the local community most interested in?

A

Success of business, compliance with local laws

36
Q

4 factors that influence location

A

Market, raw materials, labour, competition,

37
Q

What should be included in a business plan?

A

The idea, objectives/aims, finance required, market, how it will operate

38
Q

2 ways of internal growth

A

Franchising, outsourcing

39
Q

2 ways of external growth

A

Mergers, takeovers

40
Q

Franchising

A

Giving other businesses the right to sell its products

41
Q

Outsourcing

A

Pay another firm to perform tasks for you

42
Q

Merger

A

Consolidation of 2 titles

43
Q

Takeover

A

One entity takes ownership of another

44
Q

Economy of scale

A

Average cost per unity falls as output grows

45
Q

Diseconomy of scale

A

Once economies of scale is reacted- if business grows/increases output, leads to increased average cost per unit

Business (6 decks)

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