Yr 10 Flashcards
What is a partnership
A business controlled by 2 or more people
State three characteristics of an entrepreneur
Takes risks
Uses their initiative
Never gives up
What does Limited liability mean
If the business fails you will not loose possessions
What does merger mean
Two or more firms join to create new business
3 risks of an entrepreneur
Financial
Strained relationship
Health
Rewards of an entrepreneur
Financial
Self satisfaction
Independence
What are businesses objectives
Measurable targets of how to achieve business aims
What are businesses aims
The overall goals of the business
Positives of a business plan
- will help to secure a bank loan
- helps reduce risk of failure
- provides a guide of what needs to be done and when
Risks of a business plan
- needs updating regularly
- time consuming
LTD is what
Private limited company
PLC is what
Public limited company
What is unlimited liability
The owner of the business risks losing there personal possessions to pay of the debts of the business if it falls or owes money
Negatives of limited liability
Takes time to set up
Costly
What is a stakeholder
Anyone who has a interest in the business
Examples of a stakeholder
Customer
Employee
Competitors
Government
People who live by the shop
What is a shareholder
Owns a amount of the business 30*
What is an enterprise?
Spotting an opportunity to provide a product or service that people are willing to buy
What do sole traders usually have?
Unlimited liability
What are included in business plans?
Target market
Competitors
Aims and objectives
Finance
Advantages of partnerships?
Partners may have different skills
Business can still run if on is ill
Easy and cheap to set up
Financial info remains private
More ideas
Disadvantages of a partnership?
-Profits must be shared
-May be disagreement
-Partnerships with unlimited liability put personal possessions of partners at risk
What is a sleeping/limited partner?
They invest money into the business but do not take part in day to day running of the business or any decision making
What is the deed of partnership?
-provides info about the responsibilities of each partner
-states how much profits and loses will be shared
-details how much capital each partner has contributed
What is a PLC (public limited company)?
Sell shares on the stock market
What is a LTD (private limited company)?
Sell shares privately e.g family
What is a shareholder?
The owners of private and public limited company’s
How to calculate profits?
Revenue-cost
Why do businesses have different objectives?
- some owners may want to maximize profit some may not
- some businesses may not be trying to make profit they have social, ethical and service objectives
- age of the business
- level of competition
What is internal/organic growth?
When a business decides to grow by adding new products or more worker etc
What is external growth?
A business grows through buying another business or merging with another business
What is dividend?
A percentage of the profit
What is a stakeholder?
Any person or group of people who have an interest in the business
examples of a stakeholder?
Employee
Investor
Government
Customers
Supplier
Community
Competition
What is horizontal growth?
A business joins a business at the same stage of the production process
What is backwards vertical growth?
A business joins with its suppliers/ the previous stage of production
What is forwards vertical growth?
A business joins with is distributors/ the next stage of production
What is diversification?
A business joins a business in different market
What is market research?
How a business collects info and whether or both their products or services will be brought
What is primary market research?
Research done for the first time or if trends change
What is secondary research?
Research done before for example researching on a computer
What is a focus group?
Consumers who are selected to represent the target market brought together to discuss their feelings on a product/market
What is quantitative data?
Statistics/numbers
What is qualitative data?
What someone think e.g interview
How many people tend to be in a focus group?
6 to 10
What is census data?
Data collected by government every 10 years questioning the entire population on their income, occupation and so forth
What is internal data?
This refers to past scale figures, profits and comments from customers
What is market segmentation?
Is plotting the market for a product into different parts or segments
Examples of segmentation:
-age
-gender
-income
-occupation
-location
-lifestyle
What is competitor pricing?
This is when a price is set based on prices charged by competitor business for similar or identical idea
What is cost-plus pricing?
This is a pricing method that adds a percentage onto the product to make profit
What is promotional pricing?
This is a reduction in price to attract customers to an existing product or to sell off old products
What is price skimming?
A product is more advanced than that of competitors and therefore a price is set higher because customers are willing to pay higher prices to own that product. After a period of time that price will be reduced
What is penetration pricing?
When a business is new to the market a price is set lower that competitors business. This is a short term strategy to help break customers loyalties from trusted brands
Advantages and disadvantages of tv advertising?
-more costly than others
-reaches larger audiences
-can be used to target certain customers
Advantages and disadvantages of using social media advertising?
-cheaper to operate
-large numbers used social media
-quicker to update
Advantages and disadvantages of radio advertising?
-Is cheaper than tv
-can reach customers anywhere as its portable
-products cannot be seen
-listeners may skip advertisement
What is the order of the product lifecycle?
Introduction
Growth
Maturity
Fall
How may business keep a products sales up?
Increase advertising
Lower prices
Ways for products to get to consumers?
-Producer to consumer
-Producer to retailer to consumer
-producer to wholesaler to retailer to consumers
-producer to regional distribution centre to retailer to consumer
What is the wholesaler?
They break bulk
What is the retailer?
Shops like co-op or tescos
What is digital distribution?
This refers to the distribution of goods digitally by downloading from a website or app e.g purchasing a song on Apple Music
What is a distribution channel
All the organization through which a product must go through between point of production and sale
