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As-level Business > Unit 1- What Is A Business? > Flashcards

Unit 1- What Is A Business? Flashcards

1
Q

Business

A

Any organisation that makes goods or provides services

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2
Q

Suppliers

A

Firms selling products to other businesses and sell to customers

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3
Q

Consumer

A

Individual who uses the product

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4
Q

Adding value

A

Process of making a product more valuable to the purchaser

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5
Q

Ways of adding value:

A

•product features and benefits
•convience
•branding
•quality/design
•USP
•speed and excellent service

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6
Q

Mission statement

A

What the business wants to achieve
(The overall purpose of the business)

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7
Q

Corporate/strategic objectives

A

Goals of the business as a whole

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8
Q

Functional objectives

A

Objectives specific to a department

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9
Q

Define SMART objectives

A

S- specific
M- measurable
A- achievable
R- realistic
T- time specific

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10
Q

Public business

A

Owned and run by the government

(Aim is to provide for the public rather than making a profit)

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11
Q

Private business

A

Owned by private individuals
(Includes charities)

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12
Q

5 types of business ownership

A

• Sole trader
• Partnership
• Private limited companies (Ltds)
• Public limited companies (Plcs)
• social enterprise

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13
Q

Unlimited liability

A

The owner of the business being legally responsible for all the debts of the business

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14
Q

Limited liability

A

The owners of the business only having part responsibility for the debts of the business

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15
Q

Advantages and disadvantages of a sole trader

A

Individual owns the business
+quick easy set up
+simple to run
+easy to close
-unlimited liability
-harder to raise finance
-limited expertise

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16
Q

Advantages and disadvantages of a partnership

A

Started and owned by more than one person
+more expertise
+shared risk
+more ideas
-unlimited liability
-arguments
-share profit
-to close the business everyone must agree to shut down

17
Q

Private limited company(Ltd)

A

•can’t sell shares to the public
•can sell shares to friends and family
•often family businesses

18
Q

Public limited company (plc)

A

•can sell shares to the public
•shares are freely transferable and can be bought and sold through stockbrokers, banks and share shops

19
Q

Advantages and disadvantages of public limited company

A

+limited liability
+generate capital
+potentially less tax
-disagreements between shareholders
-greater admin costs
-Must disclose company info

20
Q

Ordinary share capital

A

Shares are sold by companies to raise money (this money is ordinary share capital)

21
Q

Market capitalisation is the total of al the ordinary

A

The total of all the ordinary shares issued by a company

Market capitalisation= no. Issued shares x current share price

22
Q

Shareholders

A

Owners of the company
(Must own at least one share)

23
Q

Stock

A

•type of security that represents ownership in a corporation
•sold on the stock exchange

24
Q

Roles of shareholders

A

•provide funds
•more shares = more power
•most shareholders are not involved in the running of the business

25
Q

Dividends

A

•a payment from accumulated profits earned by a company to shareholders who qualify for payment

•can only be paid if the business makes a profit

•the payment of a dividend per share is authorised by the shareholders

26
Q

Capital gain

A

Buying shares low and selling at a greater price

27
Q

Causes for increase and decrease in share prices

A

•performance of the company
•speculation and rumours of new products
•current share price
•interest rates (if bank offering low interest rates could increase demand of shares)
•state of the economy/external factors

28
Q

Rights issued

A

When a company issues existing shareholders a right to buy additional shares often at a discounted price

29
Q

What does PESTLE stand for?

A

Political
Economical
Social
Technological
Legal
Environmental

30
Q

3 types of sectors

A

•public
•private
•voluntary

31
Q

Private sector

A

Businesses set up by entrepreneurs

32
Q

Public sector

A

Goods and services produced by government owned organisations

33
Q

Voluntary sector

A

Includes charities and societies that exist to help people

34
Q

Privatisation

A

The government sells off some of what it owns to the private investors moving from the public to private sector

35
Q

Satisfycing

A

Surviving comfortably

36
Q

Business environment

A

Incorporates all the internal and external factors that affect how the company functions

37
Q

Areas of business environment

Think about the factors of PESTLE

A

-physical environment
-culture
-safety
-happiness
-political factors
-business confidence

38
Q

Reasons for a public business

A

1) private business may not be able to make profit
Eg. Street lights
2) Too important to allow private firms to run
Eg. Army

39
Q

Ethics

A

Moral principles or standards that guide the behaviour of a person or business

As-level Business (7 decks)

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