GCSE Applied Business revision

?
What is a sole trader?
An individual who owns and runs the business by themselves.
1 of 178
Can a sole trader have employees?
Yes, they may employ workers.
2 of 178
State an example of a sole trader.
Mechanic, florists, corner shop
3 of 178
I'm thinking of starting a shop, why should I be a sole trader?
Choose own hours, Keep all profit, have complete control, easy to set up, Quick decisions can be made
4 of 178
Why might a sole trader not be suitable?
Have to do all the work, Have to raise all capital alone, Unlimited liability, Illness can result in a loss of profits.
5 of 178
Define unlimited liability
A business's debt is also the owners, as they are the same legal entity and so personal assets may be seized to cover a business debt.
6 of 178
What is the difference between limited and unlimited liability?
Limited means that personal assets will not be taken to cover business debt, in unlimited, they might.
7 of 178
"When 2-20 people go into business together with a view to profit" is the definition of what business model?
Partnership
8 of 178
Define partnership
When 2-20 people go into business together with a view to profit.
9 of 178
Is a partnership always 50/50?
No, their can be 'sleeping partners'
10 of 178
Give two examples of businesses that are most likely to operate under a partnership.
Construction companies, accountants, solicitors, dentists and doctors.
11 of 178
Why is a partnership better than a sole trader?
Capital is raised between two people so initial finance is easier, dents are spread among partners, knowledge can be shared, workload can be shared.
12 of 178
Give 5 disadvantages of being in a partnership.
Less control than a sole trader, slower decisions, shared profits, disagreements, unlimited liability, more difficult than sole trader to set up.
13 of 178
What is a deed of partnership?
A legal document which details how much capital was invested, what share of the profits or loss and the roles of each partner. Also how to end the partnership.
14 of 178
Why is it advised for partners to get a deed of partnership?
It can avoid disagreements.
15 of 178
What does PLC stand for?
Public limited company.
16 of 178
Spot the mistake! "A PLC is a business owned and run by its stakeholders who have brought shares from the company, with a separate legal identity from its owners, where shares are not listed on the stock exchange""
In a PLC the shares are listed on the stock exchange, and they are called shareholders not stakeholders.
17 of 178
Define PLC
A business owned by its shareholders who have bought shares from the business, with a separate legal identity from its owners, where shares are listed on the stock exchange.
18 of 178
In a PLC are accounts public?
Yes, they are published at the end of each year.
19 of 178
What is the minimum amount of authorised share capital for a PLC?
£50,000
20 of 178
True or false "Limits are placed on the sale of shares in a PLC"
False, they can be sold to anyone.
21 of 178
Fill the gaps "The minimum number of ..................... in a PLC is ....."
The minimum number of shareholders in a PLC is 7
22 of 178
Are PLC's typically small or large?
Large
23 of 178
What is the acronym for "Private limited company"
LTD.
24 of 178
Define LTD
A business owned by shareholders who have bought shares from the company, with a separate legal identity from its owners, where the shares are not listed on the stock exchange.
25 of 178
What is the biggest difference between an LTD and PLC?
In LTD shares are not listed on the stock exchange, in a PLC they are.
26 of 178
Is a private limited company allowed to advertise its shares?
No, there are restrictions placed on them e.g. only family
27 of 178
The minimum amount of authorised share capital for a private limited company is what?
£1
28 of 178
True or false "The minimum number of shareholders in an LTD is 3"
False, it is 2
29 of 178
"An LTD is typically smaller/ larger than a PLC" Choose one
Smaller
30 of 178
Define dividends.
Dividends is the share of profits that a share holder gets at the end of a year.
31 of 178
Compare the minimum authorised share capital in a PLC and LTD.
LTD= £1 and PLC= £50,000
32 of 178
what kind of 'liability' is an LTD?
Limited
33 of 178
What kind of liability is a PLC?
Limited
34 of 178
What would be an advantage for opening as a limited company?
Limited liability, It becomes easier to borrow money from banks, Easier to raise capital.
35 of 178
Why would I be better off opening as a sole trader?
In a limited company: you have less control, you have to share the profits between shareholders, it is costly and time consuming to create, the performance of the company may not reflect its share price.
36 of 178
Why is a limited company more difficult than other models to set up?
You need a memorandum of association and Articles of association in a limited company.
37 of 178
Shareholders -elect-> Directors -oversee->.................-oversee-> employees. Fill the gap
Managers
38 of 178
Define franchise.
Ana agreement between a franchisor and a franchisee that allows the franchisee to sell goods or services using an existing brand name and system.
39 of 178
What is a franchisee?
The person or organisation buying the right to trade under the brand name.
40 of 178
"The person or organisation buying the right to trade under the brand name. " is known as what?
franchisee
41 of 178
Define franchisor.
The person or organisation selling the right to a franchisee allowing them to trade under their brand name.
42 of 178
How do franchisors gain profit in a franchise?
The get royalties, which is the percentage of profits given back to the franchisor.
43 of 178
Who is this an advantage for "They have limited control over the services and methods used within the business"
Neither, it is a disadvantage for the franchisee.
44 of 178
State an advantage for the franchisee of being in a franchise.
They can begin trading immediately, as they already have a brand and a loyal customer base.
45 of 178
Give an example of a franchise.
McDonald's, KFC, Pizza Hut.
46 of 178
What is an advantage of being a business owner and selling the right to allow others to trade under your brand name?
You get royalties with limited effort and all overheads are paid for, it can also increase the popularity of your brand as it expands.
47 of 178
Who is this a disadvantage for in a franchise model "You have to share profits"
Both
48 of 178
What does NPO stand for?
Non- Profit Organisation
49 of 178
What do you call people who run a non- profit organisation?
Trustees.
50 of 178
"Nike is an example of a non- profit organisation" True or false
False- Unicef, Red Cross or Child line are.
51 of 178
Define a non-profit organisation
An organisation that uses profits to achieve its purpose or mission.
52 of 178
Are non-profit organisations exempt from tax?
Yes
53 of 178
State the three sectors a business can operate in.
Primary, Tertiary, Sector
54 of 178
What sector is being described here "The sector involved in the manufacture of raw materials"
Secondary sector
55 of 178
Define primary sector
The sector involved in the extraction of raw materials
56 of 178
What sector does Tesco work in?
Mainly the tertiary sector, but the secondary sector also as the may bake bread and other manufacturing processes.
57 of 178
What sector is being described here "The sector involved in providing a service"
Tertiary sector
58 of 178
Can a business operate in all 3 sectors? If yes give an example, if no explain why.
Yes, for example oil companies may extract the oil in a rig, refine it and then sell it immediately to customers for car fuel.
59 of 178
Define chain of production
"Chain of production follows the construction of a good from its extraction as a raw material to its final sale to the consumer."
60 of 178
What is the chain of production for a wool jumper?
Extraction- Sheep sheared, Manufacture- Knitted after being turned into wool, Sale- sold to the consumer.
61 of 178
"The activity that is the most important and most profitable to a business." What is this the definition of?
Core business activity
62 of 178
What is Tesco's core business activity?
Sale of groceries.
63 of 178
Define core business activity.
The activity that is the most important and most profitable to a business.
64 of 178
Can a core business activity change? If so, why would it change, and if not, why not?
Yes it can change, if a minor activity of the business becomes a major part of the business.
65 of 178
What are some issues surrounding expansion in a business?
Lack of knowledge, Lack of funds, Difficult to manage, Increased competition.
66 of 178
What is the external environment, in terms of business?
Anything that a business can not control.
67 of 178
Im thinking of a change in external environment? Guess it!
Buying habits.
68 of 178
State how a change in Interest rates could be both positive and negative to a business.
Interest rates = The cost of borrowing money. Loans can be cheap I the interest rate is low, but if it is high, loans can be expensive.
69 of 178
What does SPICED stand for?
Strong Pound, Imports Cheap, Exports Dear
70 of 178
What change in the external environment could cause a strong or weak currency?
Exchange rates, which is the price at which one currency is bought and sold for another.
71 of 178
Why would SPICED be positive for Tesco?
They import products from other countries so it would be cheaper for them.
72 of 178
What is the opposite of SPICED and who would it be positive for?
WIDEC= Weak, Imports Dear, Exports Cheap. Good for exports, bad for imports.
73 of 178
"Increase in the price of goods and services over a set time period" is the definition of what change in the external environment?
Inflation
74 of 178
How would inflation be a positive thing?
It could increase profit, as all prices increase so customers would not go elsewhere even if they raised prices substantially. It could also cause profit if the business's costs rise slower than their prices.
75 of 178
True or false "A positive of inflation is that "To counteract inflation, a price rise by a business could reduce demand, customers and sales."
False, it is a disadvantage.
76 of 178
Give one example of a business cost that may increase with inflation.
Employee wages, energy prices, suppliers.
77 of 178
Define a competitor.
A business in the same market as you.
78 of 178
Who is Tesco's main competitor?
Sainsbury's
79 of 178
What does high competition cause?
May have to lower prices to attract customers, but it will result in less customers, sales and profit.
80 of 178
Complete the sentence "Less competition allows a business to......... prices without reducing demand, as their is no other choices"
Increase
81 of 178
"What a customer base requires" is the definition of what?
Buying habits.
82 of 178
"If a business' product is popular sales will........."
increase, earning them more profit.
83 of 178
State another change in external environment regarding people.
Population
84 of 178
Population is the number of people in an area, give a positive and negative change in population to a business.
Positive =More people means more potential customers, Negative= Less potential customers.
85 of 178
Define "changes in law"
Changes in what is allowed.
86 of 178
Yield could increase in the secondary sector due to a change in ..............
Climate.
87 of 178
"Climate can increase sales" True or False?
True, for example hats in winter.
88 of 178
Define stakeholder
Someone who holds an interest in the business.
89 of 178
Local community, Pressure groups, government, financiers, suppliers, shareholders, customers, employees and local community all have what in common?
They are all stakeholders.
90 of 178
State the interest and give an impact of not listening to customers.
They care about quality and prices, and if you do not listen to them they will not buy your product causing profit loss.
91 of 178
PRINTED *******************************************************
PRINTED******************************************************
92 of 178
Give an example of a Tesco pressure group.
Peta, Fairtrade
93 of 178
"Dividends" is the interest of what stakeholder?
Shareholders.
94 of 178
State the interest and give an impact of not listening to employees
They care about good wages and safe working environment. If not listened to they could strike or leave or become demotivated.
95 of 178
Complete this sentence "Local community is a stakeholder and care about..."
Employment, competition, pollution.
96 of 178
If you do not listen to the stakeholder group of the government, what could occur as a result?
Legal action.
97 of 178
Give an example of a stakeholder conflict.
Owners want expansion, competition want them to stay small. Financiers want high prices for quick repayment, customers want low prices to save. Shareholders may want high dividends, managers want expansion.
98 of 178
Complete the sentence "Functional areas are the grouping of individuals based on..."
The task each performs. What was the definition?
99 of 178
State the functional area involved in Buying raw materials to manufacture and sell on.
Purchasing.
100 of 178
Give a role of the finance department and state their responsibility.
Responsibility= to monitor the cash flow in and out of the business. Roles include, producing economic forecasts, set budgets, pay invoices, Pay staff and advise managers.
101 of 178
The actions of "Repairing broken technology, updating systems and training staff on the use of technology" is associated with which functional area?
IT
102 of 178
If I apply for a job in customer services, what will I be expected to do?
Deal with complaints, refund goods and answer enquiries. Your role is to ensure customers get the best possible service by dealing with problem areas.
103 of 178
State the responsibility of a Human Resources worker.
To recruit and manage the staff within a business.
104 of 178
To write accurate job descriptions, conduct interviews and read applications are all roles in which functional area?
Human Resources (HR)
105 of 178
Define the operations functional area.
The group of individuals that manage supply chains and production lines.
106 of 178
Give a role of the Marketing department.
To conduct customer surveys and identify customer needs. Create adverts and promotions, that reach these.
107 of 178
What do the sales functional area do?
sell
108 of 178
What are all of the consequences of an inefficient Finance department?
Debt, Unpaid employees, loss of money, lack of preparation.
109 of 178
"Out of date information, broken technology, old systems, lack of communication and mistakes" are all consequences of which functional area being inefficient?
IT, Now what where they again?
110 of 178
State three consequences of an inefficient HR department.
Employees strike, employees unpaid, Employees not trained causing mistakes, legal implications.
111 of 178
If a worker in Marketing is inefficient, what are the possible consequences?
Loss of customers due to undesired products, lack of awareness causing loss of profits, and too much stock.
112 of 178
Operations is a functional area, if they are inefficient, what could happen?
Incorrect products made, bad quality products, refunds and incorrect quantities leading to a loss in profits.
113 of 178
Define risk?
The likelihood of failure.
114 of 178
What is reward?
The potential benefits of taking a risk.
115 of 178
How are Risk and Reward linked?
The bigger the risk, the better the potential benefits are of taking it.
116 of 178
What could happen if I don't take a risk in business?
lose out to competition, have a lack of growth and lose sales.
117 of 178
I am thinking of a factor affecting risk and reward, Guess it!
Personal attitude to risk.
118 of 178
State some factors affecting risk and reward
Personal knowledge, attitude to risk, Amount of money involved, the potential benefits.
119 of 178
"To expand" is an example of a business .............. . Fill in the gap
Aim.
120 of 178
True or false, an aim is a broad statement of intent, on where the business wants to be.
True. Define it again!
121 of 178
Define objective.
A step or goal on the way to meeting an aim.
122 of 178
What does SMART stand for?
Specific, Measurable, Achievable, Realistic, Timed.
123 of 178
Give an example of a SMART objective for Tesco when their aim is to have an ethical stance.
To give 3% of profits to Unicef by 2018.
124 of 178
In terms of aims and objectives define "adapting".
A business changing its aims or goals over time, to keep fresh.
125 of 178
Give an example of a risk that a business might take.
Changing core business activity, Taking new products, changing working practices, updates, relocation.
126 of 178
What are some factors affecting aims?
Whether previous ones have been achieved, customer tastes, competitors, falling sales, new opportunities.
127 of 178
Why are aims important?
It helps with decision making, allows investors to see the direction of the business, Provides targets and motivates staff.
128 of 178
"A broad statement of intent on where the business wants to be" is the definition of what?
Aim
129 of 178
Define mission statement
A statement that sets out the purpose, values and visions of a business.
130 of 178
Why are mission statements important?
They can help to set aims and objectives, they allow investors to see direction of the business, it gives an aspiration and a common goal to motivate staff.
131 of 178
State the interest and give an impact of not listening to Suppliers
They care about payment on time and in full. If not listened to they could refuse to continue or produce a poor quality of product.
132 of 178
What is the race relations act?
The law that prohibits turning someone down because of their race.
133 of 178
Describe the sex discrimination act.
The law that makes it illegal to pay one gender more than the other, if they complete the same job role.
134 of 178
What is the 2010 equality act?
The law that makes it illegal to discriminate against someone in job applications because of their race, gender, sexual orientation,
135 of 178
If I am an employee, what would I expect from my employer?
Equal opportunities, suitable working conditions and a contract of employment.
136 of 178
How long is an employee entitled to take paid maternity leave for?
52 weeks.
137 of 178
Give a part of employment law regarding trade unions.
All employees are entitled to be part of a trade union.
138 of 178
How long is an employee entitled to take on paid holiday?
4 weeks minimum.
139 of 178
Are employees entitled to paid sick leave?
Yup
140 of 178
Complete the sentence "employers must provide a ......... working environment"
safe
141 of 178
What does an employer expect from an employee?
Adherence to procedure, punctuality, fulfilment of job role and to comply with health and safety regulations.
142 of 178
Define being made redundant
When a job role is no longer required an employer can dismiss an employee.
143 of 178
Can an employer dismiss an employee immediately?
Yes, if they breach the rules.
144 of 178
How many weeks notice is an employee expected to give an employer before leaving?
4 weeks.
145 of 178
Why is employment law a good thing?
Gives employers clear moral guidelines, ensures equal treatment, allows employers to seek replacement employees, keeps employees motivated
146 of 178
Why could employment law be seen as a bad thing?
Maternity leave can be expensive, Some laws are not followed, legislation and adherence has to be monitored.
147 of 178
I'm an employer and want to build a relationship with my employees, how could I do that?
Promotions, Perks, Recognition, Autonomy (choice of where they work), safe working environment, pay extra, training, appraisal, communication.
148 of 178
Define appraisal.
The identification of current skills and weaknesses, and then setting targets based on these, motivates employee.
149 of 178
How could communication build an employee employer relationship?
It makes them feel listened to, and so are more likely to listen back and work harder.
150 of 178
State one way in which a business can be more enterprising.
They could take risks, The could change their working practices, could be innovative (improve and adapt), they could change their use of ICT could allow Flexi-time
151 of 178
True or false "an employee can help a business to be enterprising by sticking completely to their job role"
False
152 of 178
Give a way in which employees can help a business to be enterprising.
They can work with changes, be adaptable sin their job role, promote them on social media, Suggest ideas and participate in improvement projects.
153 of 178
Why should I be enterprising?
It can increase profit, beat competitors, expand business, meet customer needs, bring in customers, motivate employees and improve reputation.
154 of 178
Im a nervous, satisfied businessman, do I have the right attitude to be enterprising and why?
No because you need to be motivated, creative, ambitious and have self-belief.
155 of 178
Why might somebody start a business?
It was a life long ambition, financial possibility, opportunity, inherited family business, invited to run someone else's business
156 of 178
What ICT would I use to produce reports?
Word processor.
157 of 178
What ICT would I use to Research competitors and new products
Internet.
158 of 178
Give a use of e-mail.
To complete internal and external communication.
159 of 178
Give a use of databases and why it might be a benefit to upgrade it.
To track stock levels and customer detail. Benefit is that it improves accuracy and takes less space than conventional paper methods.
160 of 178
Give a benefit of upgrading computers in a business.
It can save time, increase accuracy create more professional looking advertisements, and may allow workers to work from home with a PC.
161 of 178
Is social media a form of ICT?
Yes
162 of 178
Are cash machines and security cameras examples of ICT?
No
163 of 178
What is a use of social media?
To contact customers and target promotions.
164 of 178
What might a website include?
Contact details, opening hours, Location, Promotional details and Possibly an e-commerce site.
165 of 178
Why would updating a website be beneficial to a business?
It will save customer time, encouraging them to use it more and increase your profit.
166 of 178
"To present information graphically, calculate finance and general accounting" are all uses of what form of ICT?
Spreadsheets.
167 of 178
Why would a spreadsheet be better than by hand?
It increases accuracy and errors can be amended quickly.
168 of 178
Complete the sentence "One advantage of upgrading ICT is...."
Safer, Marketing is easier, Improves customer experience, Increase reliability, Reduce labour costs as ICT can replace workers, Faster so time can be spent elsewhere and improve accuracy.
169 of 178
I don't want to upgrade my ICT! Why might that be the best idea?
There is a short term expense (overcome in long run due to less repairs), may require costly staff training, may still require regular maintenance.
170 of 178
"A businesses view on what is right and wrong affecting the way they act" is the definition of what?
Ethics.
171 of 178
How does a business ensure ethical behaviour?
Monitoring commitee.
172 of 178
Give one example of ethical behaviour.
Paying employees a living wage, Giving them more time off, Fair payment of suppliers eg. fair trade, ensuring animal welfare.
173 of 178
Why is acting ethically a benefit to the business?
It can motivate employees, ensure customers feel positive about buying there, Ensures business can continue, suppliers will deliver quality, keeps pressure groups happier.
174 of 178
Why is acting unethically a bad thing?
It demotivates employees, causes bad reputation, losing customers and suppliers, Share price decreases, pressure groups will campaign against it.
175 of 178
Fill the gaps "sustainability is taking ____ __ ____ ___ _____ without ____________ the needs of the ______"
Sustainability is taking what we need for today without jeopardising the needs of the future.
176 of 178
I want to act sustainably, give suggestions on some actions I should take to achieve this.
Recycle waste, turn off equipment when not in use, use emails to reduce paper production or print double sided, video conference to reduce travel, reduce water usage, encourage staff to cycle to work, use renewable energy, insulate buildings.
177 of 178
Stay hydrated!
*yay*
178 of 178

Other cards in this set

Card 2

Front

Can a sole trader have employees?

Back

Yes, they may employ workers.

Card 3

Front

State an example of a sole trader.

Back

Preview of the front of card 3

Card 4

Front

I'm thinking of starting a shop, why should I be a sole trader?

Back

Preview of the front of card 4

Card 5

Front

Why might a sole trader not be suitable?

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Applied Business resources:

See all Applied Business resources »See all All resources »