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What Is Business Flashcards

1
Q

What do business provide

A

Businesses provide goods and services for the market

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2
Q

Who do business provide for

A

Businesses supply goods and services to consumers and businesses

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3
Q

What are goods

A

Goods are tangible products which can be physically held

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4
Q

What are services

A

Services are intangible products

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5
Q

What impact do businesses have on countries residents

A

Businesses provide employment which allows individuals to earn an income and purchase goods and services

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6
Q

What is an example of a business having an impact on a countries residents

A

In 2019, Tesco employed around 300,000 staff

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7
Q

How can businesses enhance the life of consumers

A

Businesses create new goods and services which can enhance the lives of consumers

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8
Q

What is example of a business enhance the life of consumers

A

pharmaceutical businesses like Pfizer have developed new medicines that cure illnesses and improve people’s quality of life

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9
Q

What can businesses do for countries

A

Businesses can allow a country to improve and develop the country’s reputation

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10
Q

What is an example of a business improving a countries reputation

A

many financial service businesses in the UK provide their products to many countries around the world and this improves the UK’s reputation

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11
Q

What is the transformation process

A

Businesses convert inputs into outputs

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12
Q

Why is the transformation process called the transformation process

A

This is called the transformation process and businesses will add value to their goods and services throughout this process

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13
Q

What are b2c businesses

A

Some businesses sell their goods and services directly to consumers and these businesses are known as business to consumer (or B2C) organisations

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14
Q

What is an example of a b2c business

A

Spotify provides music streaming services and sells these to consumers. Spotify is, therefore, an example of a business to consumer organisation

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15
Q

What are b2b businesses

A

Other businesses sell their goods and services to other businesses and these are known as business to business (or B2B) organisations

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16
Q

What is an example of a b2b business

A

Hootsuite sells social media management services to other businesses such as Virgin. Hootsuite is, therefore, an example of a business to business organisation

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17
Q

What are the different types of sectors

A

Primary
Secondary
Tertiary

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18
Q

What do primary sector businesses do

A

Primary sector businesses extract or grow raw materials

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19
Q

What are examples of primary sector industries

A

fishing, mining, and forestry

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20
Q

What do secondary sector businesses do

A

Secondary businesses manufacture goods using raw materials

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21
Q

What is an example of a secondary sector industry

A

Mobile phones

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22
Q

What do tertiary businesses provide

A

Tertiary businesses provide services

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23
Q

What are examples of tertiary sector businesses

A

hotels and cinemas

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24
Q

What do businesses mission statements set out

A

Businesses have a mission statement which sets out the business’s beliefs and values

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25
How will a businesses use its mission statement
A business will use its mission statement to create corporate aims
26
What are corporate aims
long-term goals of the entire business
27
What do corporate aim allow businesses to do
These corporate aims will allow the business to work towards its overall mission
28
What is the process for corporate aims
Corporate aims are stated. Then, corporate objectives that contain the specific tasks and activities a business must accomplish in order to satisfy its corporate aims are written down
29
What can corporate objectives be broken down into
Corporate objectives can be broken down further into functional, team and individual objectives
30
Why are business objectives needed
Business objectives are needed for a business to achieve its corporate aims and fulfil its mission
31
What does the SMART acronym stand for
``` Specific Measurable Attainable Realistic Timely ```
32
Why must objectives be specific
Objectives must be Specific so that employees know exactly what they are working towards
33
Why must objectives be measurable
Objectives must be measurable so that employees can actually work out whether they have met their objective
34
Why must objectives be attainable
Objectives must be Attainable or achievable so that employees are committed to achieving them
35
Why must objectives be realistic
Objectives must be Realistic otherwise employees may feel demotivated and overwhelmed
36
Why must objectives be timely
Objectives must be Timely so that employees know when they must achieve them by
37
What does the business objective profit maximisation require
Profit maximisation is a business objective that requires a business to achieve the highest amount of profit for shareholders
38
How would you satisfice the business objective profit maximisation
Satisficing would mean making enough or some minimum required level of profits
39
What does the businesses objective survival require
Survival is a business objective which requires a business to continue trading despite challenges in the external environment
40
What does the businesses objective growth require
Growth is a business objective which requires the growth of stores or locations, sales value, sales volume or product range
41
What does the social, ethical and environmental businesses objective require
Social, ethical and environmental objectives require a business to focus on supporting society through initiatives including sustainability and fair trade
42
What are the benefits of setting objectives
Business objectives provide direction and can support planning and operations Business objectives allow a business to co-ordinate resources and ensure that all employees are working towards the same overall aim
43
What is revenue
Revenue is the income earned by a business from the sale of its goods and services
44
What is the revenue calculation
Revenue = number of sales x sales price
45
What are costs
Costs are all of the expenses that a business pays
46
What is involved in costs
This involves everything from wages paid to employees to the electricity bills at the business’ premises
47
How are total costs calculated
The total costs are calculated as the sum of the fixed costs and the variable costs
48
What are examples of fixed costs
Examples include office rent, insurance, and fixed employee salaries
49
When can Fixed costs increase
Fixed costs can increase as the business grows
50
What are variable costs
Variable costs are the costs that change directly with output
51
What are examples of variable costs
Examples include the wages paid for factory labour, raw materials and transport costs
52
What is profit
Profit is the amount of money that the business makes when taking into account costs
53
What is the Profit equation
Profit = total revenue – total costs
54
When is a businesses making a profit
If revenue is greater than costs, a business will make a profit
55
When will a business make a loss
If costs are greater than revenue, a business will make a loss
56
What is the average unit cost calculation
Average unit cost = total cost ÷ output
57
What is output
Total number of units produced
58
What does average unit cost give businesses
Average unit cost gives a business an idea of what price they need to charge
59
What do businesses need to do to make profit on each item
In order to make a profit on each item, they need to charge a price that is more than the average unit cost
60
What is interest
Interest is the additional money you have to pay back on top of your original loan
61
What is the interest equation
Interest = interest rate x the size of the loan
62
What is a sole trader
A sole trader is a single person who is the exclusive owner of a business
63
What are the advantages of being a sole trader
Advantages of sole traders: They are the easiest type of business to set up The sole trader gets to be their own boss The sole trader decides what to do with the profit It is easy to change the legal structure if circumstances change
64
What are the disadvantages of being a sole trader
``` Disadvantages of sole trader: Unlimited Liability It can be hard to raise finance All the responsibility for making business decisions is yours It can be harder to keep good employees ```
65
What does unlimited liability mean
Unlimited Liability means that there is no legal distinction between the sole trader’s assets and the business’ assets
66
Why can it be hard for a sole trader to raise finance
It can be hard to raise finance. Banks often see sole traders as riskier
67
Why can it be harder to keep good employees at a sole trader
It can be harder to keep employees as they aren’t necessarily given a share of the profits
68
Why is having all decision making power a bad thing
All the responsibility for making business decisions is yours. Having someone to share decision making with, can improve performance
69
What are private limited companies
Private limited companies are companies where ownership of shares is restricted
70
What needs to happen for a private limited company to sell shares
For the company to sell shares, all the current shareholders must agree to sell them
71
What do private limited companies have after their name
These companies have Ltd. after their name
72
What are the advantages of private limited companies
Advantages of Private limited companies are: Limited liability Owners keep a lot of control over how the business is managed Easier for a limited company to get a loan`
73
Why do Private Limited companies keep a lot of control over how the businesses is run
The fact that ownership is restricted means that all shareholders must agree to sell shares. This means that the own keep a lot of control over how the business is managed
74
Why is it easy for a Private Limited company to get a loan
It is normally easier for a limited company to get a loan than it is for partnerships, as a company is normally seen as less risky
75
What are the disadvantages of Private Limited Companies
Finance is needed to incorporate a business | The company is legally obliged to publish their accounts each year
76
What costs are associated with becoming a Private Limited Companies
There is an upfront fee as well as costs associated with paperwork
77
Why is it bad that a company to publish its accounts
The company is legally obliged to publish their accounts each year and competitors may use these to become more competitive
78
Where do public limited companies sell shares
Public limited companies sell shares on the stock exchange
79
Who can buy shares from a public limited company
Anybody over 18 can buy shares from a Public Limited Company
80
When do firms often become Public Limited Companies
Firms often become public companies when they want to expand because selling shares on the stock exchange allows them to raise finance for investment
81
What is an example of a businesses who became a Public Limited Comapny
In 2017, Snapchat went through this process
82
What are the advantages of Public Limited Companies
- Selling shares on a stock exchange allows companies to raise money for investment - It is much easier for companies to raise money from banks - Shareholders have limited liability
83
What are the disadvantages of Public Limited Companies
- Owners often have very little say over how the business is run - Anyone can take over the company if they are able to buy enough shares - The company’s accounts must be made public
84
Why is it bad if the owner has little say over how the businesses is run
Owners often have very little say over how the business is run. This means that it can be hard to agree on how the business is run
85
What do shareholders have if they have more than half of the shares
When shareholders own more than half the shares, then they will have control over the company
86
Why is it bad that Public Limited Company's accounts must be made public
The company's accounts must be made Public. This means competitors can see how well the company is doing
87
What happens to profit made by not-for-profit organisations
Any profit made by not-for-profit organisations is reinvested back in the business
88
What can't owners do with profit from not-for-profit organisations
Any profit from not-for-profit organisations cannot be kept by the owners

Business (10 decks)

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