Starting a business

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  • Created by: Charlie.R
  • Created on: 15-10-16 16:24
Why do businesses exist?
Businesses exist to make money, to fill a gap in the market and to peruse a career in something you enjoy.
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What is an entrepreneur and what skills do you need to become one?
An entrepreneur is an individual that has an idea for a new business or product.You need to be hardworking, determined, inventive, resilient and organised.
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What is a gap in the market?
A gap in the market is a space for a business or product that doesn't yet exist that meets a consumer need that hasn't yet been met.
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What is a niche market?
A niche market is a specific part of a market, very small and speacilsed to one, specific and unique need of a customer.
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What is the mass market?
The mass market is every business, product, need and customer- so the whole market.
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What are the advantages/disadvantages of being a Sole trader?
Advantage- you get all of the profit/credit,you get to make all of the decisions, the business is completely yours. Disadvantage- you have 100% of the workload, no business partner to confer with. Pierre Omidyar, eBay.
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What are the advantages/disadvantages of partnerships? +2 examples
Advantage- workload shared,there's more experience, you can confer with your business partners.Disadvantages- profit shared, people may argue - business splits, creative disputes. Apple and Warner Bros.
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What are the advantages/disadvantages of Private Limited Companies?
Disadvantages- costly to set up and have complex accounts. Advantages- owners have unlimited liability,lower tax is paid. Warburtons and New Look.
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What are the advantages/disavantages of Public Limited Companies? +2 examples
Advantages- able to sell shares (more money), if shareholder dies the business continues. Disadvantages- many people owning shares in the business- hard to communicate effectively , minimum two directors. Marks & Spencer and Yahoo!
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What are the advantages/disadvantages of Franchises? + example
Advantages, There is already a business format and you have access to help and support. Disadvantages, You have to pay an initial fee and the business itself is not actually yours.MacDonalds.
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What is limited liability + unlimited liability?
Limited Liability-shareholders responsible for debts of the business, if it gets into debt possessions can be confiscated to pay off debts.Unlimited liability-shareholder isn't responsible for any debts of the business so possessions/property cannot
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What is an aim?
An aim is a goal, something a business aims to do. It is usually quite general.
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What are aims that a small business may have?
A small business may aim for survival, growth and an increased market share.
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Why are aims important for firms?
Aims are important for firms because it helps outline their goals and makes them more realistic as they can plan how to achieve them. It also makes the staff more focused, know what they have to achieve and can work on it specifically.
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What is a stakeholder? + 3 examples
A stakeholder is somebody that a business has an effect on or have invested into the business. Workers, managers and the local community.
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How can stakeholders influence businesses and their decisions? (Small businesses)
Owners and customers are primary stakeholders.Owners can influence the business by saying, e.g, that they are making top sales the priority instead of profit. Customers influence because, if ignored, businesses can fail.
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How can stakeholders influence businesses and their decisions? (Large companies)
Shareholders are primary stakeholders. They can influence the business by deciding, for example, the current director isn't running the company efficiently and can fire him.
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How can stakeholders interests conflict?
They can conflict when managers/owners decrease staff wages for higher wages themselves. Also, when owners using cheaper transport so they get more profit but the greenhouse gases are bad for the environment and upset the local community.
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What is a business plan?
A business plan is a document that businesses develop to help plan their business and a document to refer back to when up and running to view aims and strategies.
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What can a business plan be used for?
For planning so they can set up their business easier, be more likely to succeed and to view aims and strategies whilst up and running. It can also be used to show banks when trying to get a loan to finance the business.
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Sections from a business plan include...
Aims/Objectives Staff/Wages Location Marketing Mix Predicted cash flow estimated costs.
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What is Location?
Location is the physical place where a business is operated and controlled.
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What are push factors? + 2 examples
A negative aspect of a location which makes it less desirable to a business, 'pushing' it from choosing to operate in that location. Expensive to buy/rent Low Footfall.
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What is a pull factor? + 3 examples
A pull factor is a positive aspect of an area that encourages a business to operate there. Close proximity to market High Footfall Good Transport Links
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Why is proximity to market important when considering location?
Proximity to market is important because if your business is located far from its target market it is less likely to get customers and will therefore make less sales and profit. This could eventually lead to the business going into debt.
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Why are transport links important when considering location?
Transport links are important because they enable staff to get to work easily, to bring supplies in from afar and to distribute products quickly.
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Why is competition important when considering location?
Competition is important because a business wants to be located close enough to competition that they are close to their target market and there is higher footfall. However, if competition is more established potential customers may choose it instead.
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Why is cost important when considering location?
It's important because a small business may not be able to afford to buy or rent.
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Why may some businesses choose to locate abroad?
The minimum wage may be lower, more money for managers. Cheaper labour, cheaper rent.
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What is e-commerce and why would businesses choose to sell via e-commerce?
E-commerce is when people/businesses buy and sell online. Businesses choose to sell via e-commerce because it reduces outgoing costs, no staff needed online. Access to more people, everyone on the Internet.
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Is this always ethical?
No because websites can be set up with fake details to look like a brand in order to steal credit card/ bank details and commit fraud. Also email-spamming can occur by the websites/companies.
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Other cards in this set

Card 2

Front

What is an entrepreneur and what skills do you need to become one?

Back

An entrepreneur is an individual that has an idea for a new business or product.You need to be hardworking, determined, inventive, resilient and organised.

Card 3

Front

What is a gap in the market?

Back

Preview of the front of card 3

Card 4

Front

What is a niche market?

Back

Preview of the front of card 4

Card 5

Front

What is the mass market?

Back

Preview of the front of card 5
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callumburnapp

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card 11 is wrong

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