business unit 1

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  • Created by: bertie321
  • Created on: 26-09-21 16:41
what do businesses supply?
good and services
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what are the reasons why businesses are set up?
providing a good or service that someone will pay for, to distribute goods, to benefit other people and because they see an opportunity like franchising
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what does the primary sector provide?
raw materials
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what does the secondary sector provide?
manufactured goods (they turn raw materials into the finished product)
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what does the tertiary sector provide?
they provide the services (eg: hairdressing)
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how do entrepreneurs have different objectives?
because some people become entrepreneurs because they want to earn more money, people do it as there is a gap in the market,people want to be their own boss and some people want to follow their interests.
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what qualities do you need to be an entrepreneur?
hardworking,organised,innovative and the willingness to take a calculated risk
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what are the four factors of production?
land,labour,capital and enterprise
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what is an opportunity cost?
it is the benefit that's given up to do something else
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what is a sole trader?
it is a business with just one owner
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what are the advantages of a sole trader?
you get to be your own boss
you get to say what happens to the profits
easy to set up
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what are the disadvantages of a sole trader?
long hours
not many holidays
unlimited liability
unincorporated
hard to raise money
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what is a partnership?
it is the same as the sole trader but you have two or more people running the business
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what are the advantages of a partnership?
more ideas and skills,share the workload and more money can be put into the business
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what are the disadvantages of a partnership?
everyone is responsible for each other,unlimited liability and more owners means more disagreements
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what is a private limited company?
owned by private shareholders (family)
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what are the advantages of a private limited company?
limited liability,easier to get a loan and owners keep a lot of control on how the business is managed
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what are the disadvantages of a private limited company?
more expensive to set up and they have to publish the accounts every year
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what is a public limited company?
this means the companies shares anyone can buy them as they are on the stock exchange
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what are the advantages of a public limited company?
much more capital can be raised than any other type of business, it is easier to expend the company and limited liability
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what are the disadvantages of a public limited company?
it is hard to get every shareholders to agree,easy for someone to take over the company by buying the shares and the accounts have to be made public
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why does a business have to choose there legal structure?
because they need to decide if they want limited of unlimited liability and how much control you want over how the business is run
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what are the different aims a business can have?
survival,maximise profit, growth, increase shareholder value, increase market share, do what's right socially and ethically and achieve customer satisfaction
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why do businesses have objectives?
it is because it helps businesses achive their aims
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what are the factors that may affect the objectives a business chooses?
the size, the level of competition, new legislation, changes in the economy, changes in technology and environmental expectations
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why would the company objective change over time?
because they may have succeeded in their previous objective eg: a start up business will want to survive and when they have done that they may want to grow or make more profit
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how do a business monitor success?
by using objectives eg: profit against target, number of employees share vale or shareholder value
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what is revenue
the income gained by the business
revenue = Sales x Price
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what are costs
they are the expenses paid out to run the business
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what are the two different types of cost
fixed and variable
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what is profit
it is when a business earns more than they spend
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what is a business plan
it is an outline if what a business will do and how it will do it.
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what are the seven sections of a business plan
personal details, mission statement, objectives, product descriptions, product details, staffing requirements and finance
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what are the 5 main sectors that is influenced by location
location of raw materials, labour supply, competition, location of the market and cost
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what is economies of scale
it is when you average unit costs decreases and this happens to large companies
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what is diseconomies of scale
it is when you average unit costs increase
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what are internal exspansion methods
e-commerce, opening new stores and outsourcing
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what is franchising classed as
organic growth
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what are some exsternal exspantion methods
merger and takeover
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what are the four ways a business could merge or takeover
suppliers, competitor, customer and unrelated firm
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Other cards in this set

Card 2

Front

what are the reasons why businesses are set up?

Back

providing a good or service that someone will pay for, to distribute goods, to benefit other people and because they see an opportunity like franchising

Card 3

Front

what does the primary sector provide?

Back

Preview of the front of card 3

Card 4

Front

what does the secondary sector provide?

Back

Preview of the front of card 4

Card 5

Front

what does the tertiary sector provide?

Back

Preview of the front of card 5
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