Unit1 Flashcards
What is a good
Something that is tangible e.g. Mobile phone
What is a service
Something that is intangible e.g. Hair cut
What is a customer
It is someone who buys/ purchases the good or service
Consumer
Someone who uses the good / service. They don’t have to have paid
What is an entrepreneur
A person willing to take a risk and starts and runs there own business
What are the 3 industrial sectors
Primary, secondary, tertiary
What happens in the primary sector
You extract raw materials from the land or sea
What happens in the secondary industry
You turn raw materials into products
What happens in the tertiary sector
The selling and distributing of the products
What is Interdependency
Buisness’s in a chain of production rely on one another
What is social enterprise?
A business that achieves a reward for society. They make money in a socially responsible way. They reinvest money into or business or community
What is traditional enterprise
To make money and satisfy shareholders enterprise
What is a aim and a objective
A aim is the overall goal to achieve
A objective are the steps taken to achieve the aim
Why do people start social enterprise business?
- they want to change the world
- they,re not just in it for the money
Start up
A new business operating in the market place for the first time
What is a niche market
A buisness that targets a small specific segment of the market
What is a mass market
Where buisnesses target there product at the entire market and appeal to all customers
Adv and disadvantage for mass market
ADV
-Can be produced for a really low cost
-High sales revenue as product is standardised and appeals to people
DISADV
-Lots of competition (perhaps even global)
-Quality may suffer as production happens in larger volume
-Hard to understand customer needs especially if said globally
ADV AND DISADV FOR NICHE MARKET
ADV
-Less competition especially from larger buisnesses
-Specialised products and often high quality
-Products usually have a unique selling point
DISADV
-Smaller market to sell therefore lower sales
-Can charge a higher price
What’s a mission statement
It’s what a company wants to achieve and how it wants to act. It sets out the vision and values of a buisness
Aims for a new small startup business
- to survive the first year
- to break even
- to achieve a certain level of sales
- to make profit
- to achieve/ grow market shares
Judging success
- profit
- how big the buisness is
- standard of service
- share price
- number of employees
- sales
What is a market share
The amount of sales a business gets out of the total sales in a industry
Equation - (company sales/total industry sales) x 100
What is a creditor
People or organisations to whom the business owns money
What is a franchise?
It is where a business sells the rights to another buisness to use their name, product or process
Franchisee- he rents out the buisness
Franchisor- the person who owns the original business
Adv/ Disadv of a franchisor
Adv
- The buisness grows
- you get regular loyalty payments
- you keep control
Disadv
- reputation is reliant on others
- you could have received all profit if you set up all the stores
Adv/disadv of a franchisee
Adv
-you can sell established products using successful brand image
-easy to start-up
-help and training available
Disadv
-No flexibility- must follow franchise model
-must pay a percentage of profits to the franchisor (royalty)
What is a buisness plan
A written report showing what the business plans to do and what it needs to do to achieve its aims and objective.
Why do you need a business plan
- to see if a idea is feasible (going to work)
- to get the best possible chance of success
- to get funding
- to attract investors
What are the main factors affecting location
- cost of site
- skills of local people
- labour costs
- competition
- transport links
What is a sole trader and adv and Disadv
Sole trader- a business that is owned and run by a single individual
Adv:
- you can make all the decisions
- keep all profit
Disadv:
- unlimited liability
- No employees
What is a private limited company
A small to medium sized buisness that is usually owned by its founders
What is unlimited liability
Buisness owners are responsible for all depts of a business. May have to sell own possessions to pay creditors
What are partners
Partners are the joint owners of a buisness. The law says a partnership can have between 2-20 partners.
Rules of partnerships
How profit should be shared
% capital each person puts in
Votes (each partner has)
Rules for taking on new partners
Adv and Disadv for partnerships
Adv: - sickness covered - risk is shared - wider services to offer - partners raise capital together Disadv: - conflicts may arise - deed of partnership not compulsory - decision time might are along time
Limited company
You have a limited liability. You can only loose the amount of capital you invest
LTD-
PLC-
- private limited company
- public limited company
LTD Adv and Disadv
- limited liability
- not all personal finance therefore risk is spread
- Acess to finance is easier
What is a stake holder
Any individuals or groups who rare affected by a buisness actions
