Setting up a business & The types of businesses
- Created by: Dominikkovacs
- Created on: 09-01-18 11:25
Why do businesses exist?
Businesses exist because they are formed by entrepreneurs and are subsequently developed if they manage to get beyond the survival stage.
Most businesses exist in order to earn a return for the business owners, and the potential for profit is a key motive for entrepreneurial activity
To survive and pay the bills of the owner who is usually only just getting by or possibly not even.
What is the primary sector?
It involves acquiring raw materials. For example, metals and coal have to be mined, oil drilled from the ground, rubber tapped from trees, foodstuffs farmed and fish trawled. This is sometimes known as extractive production.
What is the secondary sector?
It is the manufacturing and assembly process. It involves converting raw materials into components, for example, making plastics from oil. It also involves assembling the product, eg building houses, bridges and roads.
What is the tertiary sector?
It refers to the commercial services that support the production and distribution process, eg insurance, transport, advertising, warehousing and other services such as teaching and health care.
Difference between niche and mass market
Unlike mass marketing, niche marketing focuses on a smaller group of people with easily identifiable preferences, wants and needs.
What's a business plan?
It is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.
Things within a business plan
Finance, human resource management and marketing
What is a franchise?
An authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities, for example acting as an agent for a company's products.
Advantages to a franchisee of setting up a franchi
It offers the independence of small business ownership supported by the benefits of a big business network.
Advantages to a franchisor of setting up a franchi
They don't get to keep all the profit.
Features of a franchise
Product distribution franchises get use of a franchisor's trademark and logo to sell products.
Most franchises are business format, which provides products and methods to run the business.
Difference between aim and objective
Objective = the action(s) you will take in order to achieve the aim. Aims are statements of intent.
Meaning of S.M.A.R.T.
S.M.A.R.T. goals are Specific, Measurable, Attainable, Relevant, and Timely.
What is a sole trader - features of?
A sole trader is a person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses.
Features of a sale trader - Liability
Taxes
Control
Consideration
Meaning of entrepreneur
A person who sets up a business or businesses, taking on financial risks in the hope of profit.
Unlimited liability
An unlimited liability business involves joint owners that are equally responsible for debt and liabilities accrued by the business; this liability is not capped and can be paid off through the seizure of owners’ personal assets, making it different from limited liability ventures.
Bankruptcy
It's when a business loses all of their money.
Difference between limited and unlimited liability
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