what is a business? Flashcards
What is a Business?
An organization that provides goods or services to customers in exchange for money.
What are Goods?
Physical, tangible products like cars, books, or food.
What are Services?
Intangible products such as banking, teaching, or cleaning.
What is the Primary Purpose of a Business?
To satisfy customer needs and make a profit.
What are the Main Types of Business Organizations?
Sole trader, partnership, private limited company (Ltd), and public limited company (Plc).
What is Profit?
The financial gain made when total revenue exceeds total costs.
What are the Advantages of Being a Sole Trader?
Easy to set up, full control, and keeps all profits.
What is a Sole Trader?
A business owned and run by one person.
What are the Benefits of a Partnership?
Shared decision-making and more capital available.
What is a Partnership?
A business owned by two or more people who share responsibility.
What are the Disadvantages of Being a Sole Trader?
Unlimited liability and harder to raise capital.
What is a Private Limited Company (Ltd)?
A business owned by shareholders with limited liability, but shares are not publicly traded.
What are the Drawbacks of a Partnership?
Unlimited liability and potential for disputes.
What is a Public Limited Company (Plc)?
A business whose shares are traded on the stock market and have limited liability.
What is the Difference Between Private and Public Sector Businesses?
Private sector businesses are owned by individuals or groups, while public sector businesses are owned by the government.
What is Limited Liability?
Shareholders are only responsible for the debts of the business up to the value of their shares.
What is Unlimited Liability?
The owner(s) are personally responsible for all the debts of the business.
What are Business Objectives?
The specific goals or targets a business aims to achieve.
What is a Common Objective for Many Businesses?
Maximizing profit, increasing market share, or growing sales.
What is Corporate Social Responsibility (CSR)?
The idea that a business should be accountable for its impact on society and the environment.
What are Stakeholders?
Individuals or groups that have an interest in the performance and activities of a business, like employees, customers, and suppliers.
How is Revenue Calculated?
Revenue = Price per unit × Number of units sold.
What is Revenue?
The total income a business earns from selling goods or services.
What are Fixed Costs?
Costs that do not change with the level of output, like rent or salaries.
What is Cash Flow?
The movement of money into and out of a business.
What are Total Costs?
The sum of fixed and variable costs.
What are Variable Costs?
Costs that change with the level of output, like raw materials or direct labor.
What is the Formula for Profit?
Profit = Total Revenue - Total Costs.
Why is Cash Flow Important?
It ensures a business can pay its bills and operate smoothly.
What is a Mission Statement?
A short description of a business’s overall purpose and values.
What is the Difference Between a Mission and a Vision Statement?
A mission statement describes the business’s purpose now, while a vision statement outlines its future aspirations.
What is a Business Strategy?
A long-term plan to achieve business objectives.
How is Market Share Calculated?
Market Share = (Sales of the Business / Total Market Sales) × 100.
What is Market Share?
The percentage of total sales in a market controlled by one business.
What is a Business Plan?
A document outlining a business’s goals and the strategies it will use to achieve them.
Why is a Business Plan Important?
It helps secure investment and provides a roadmap for success.
What is the Secondary Sector?
The part of the economy involved in manufacturing and construction.
What is the Primary Sector?
The part of the economy that extracts and uses natural resources, like farming or mining.
What is the Tertiary Sector?
The part of the economy that provides services, like retail or healthcare.
What is Business Ethics?
Principles that guide the way a business behaves, focusing on what is morally right or wrong.
