Unit 1 - What Is Business Flashcards
What is the transformation process?
Inputs–> transformation process –>output
What are the 4 business sectors?
Primary
Secondary
Tertiary
Quaternary
What is primary and secondary market research?
Primary- extraction of natural resources
Secondary - production of natural resources to goods
What is tertiary and quaternary business sector?
Tertiary - providing the goods and services
Quaternary - providing information and ICT
What is adding value?
The process of creating value by transforming inputs into outputs
What does unincorporated mean?
- unlimited liability
- no legal difference
What is incorporated?
- limited liability
- seperate legal identity
What is a sole trader?
Someone who trades by themselves and has unlimited liability
What is a private limited company?
- Has limited liability
- sell shares to friends and family only
What is a public limited company?
- had limited liability
- public can buy shares
What are advantages of a sole trader?
Quick and easy
Simple to run
Minimal paperwork
What are disadvantages to a sole trader?
Unlimited liability
Harder to raise finance
Higher tax rate
What are advantages to a private limited company?
- limited liability
- easy to raise finance
- stable structure form
What are disadvantages to a private limited company?
- greater admin costs
- public disclosure of info
- legal duties
What is pestle?
Political
Economic
Social
Technological
Legal
Ethical/environmental
What are dividends?
Payments made to shareholders by the company from earned profits
What is the equation for market capitalisation?
Share price × number of issued shares
What is market capitalisation?
The total market value of issued share capital of a business
Define flotation
The admission of shares of a public company to a stock exchange and trading
What does B2C and B2B stand for?
B2C - business to customer
B2B - business to business
What is a mission statement?
Sets out what an organisation is trying to achieve. The reason it exists
What does SMART stand for?
Specific
Measurable
Achievable
Realistic
Time bound
What is GDP?
Measures the value of a countries total output of goods and services over a period of time.
Name 6 business objectives
Profit
Growth
Survival
Cash flow
Social
Ethical
What is a franchise?
When a business sells their name to others for them to trade under
What is a mutual?
When their are no owners and are for the benefits of the members
What is capital gain?
When a business increases in value
In the external environment, what does MIIDEF stand for?
Market conditions + competition
Incomes
Interest rates
Demographic factor
Environment
Fair trade
