Starting a business

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  • Created by: JennD
  • Created on: 30-10-16 18:41
Why do people decide to start their own business?
to make a huge fortune, to have a steady income, to be their own boss, can not find a job anywhere else, have an idea they want to put into practice etc.
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What is the biggest aim for new small businesses?
To survive
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What are 2 examples of a 'not-for-profit' organisation?
A charity and the government
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What do 'not-for-profit' businesses do with their profits?
Invest it back into the business
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Definition of a social enterprise
A business that invests it's profits back into the community to benefit society
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Definition of a business
Organisations that provide a good or service
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Definition of a gap-in-the-market
A product or service that no other business is already providing, missing a customer want or need
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Definition of a niche market
A small part of an overal market that is amde up of customers with a particular need
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What is calculated risk?
Where you way up the pros and cons of starting a business to see if it has any chance of success
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Name 5 qualities an entrepeneur must have
think ahead, inivative, drive and determination, decisiveness and good networking skills
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Definition of a sole trader
A business owned by one person
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What are the advantages of being a sole trader?
Really easy to set up, you are your own boss and you alone decide what happens to the profits
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What are the disadvantages of being a sole trader?
have unlimited liability, have to work long hours, if you are not there to run the business you will not make any profit
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Definition of unlimited liability
Where your are responsible for financial debt the business incures
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Definition of a partnership
A business run by 2-20 people
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What are the advantages of being a partnership?
have more ideas, shared workload and more capital is invested into the business
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What are the disadvantages of being a partnership?
leally responsible for each other, most have unlimited liability and there are more disagreements about the buisnesses direction
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Definition of a private limited company
A business that can only sell shares to familiy and friends. It has Ltd. after it's name
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What are the advantages of being a private limited company?
have limited liability, more money invested into the business through shares and the shares can be sold at any time
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What are the disadvantages of being a private limited company?
Expensive and time consuming to registra, financial information is available to the public and the shareholders may not have enough money to expand
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Definition of a public limited company
A company that can sell it's shares to anyone. They have Plc. after their name
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What are the advantages of being a public limited company?
Have limited liability, easyily borrow money from banks and shareholders get dividens
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What are the disadvantages of being a public limited company?
Complicated and expensive to set up, general public can view your accounts and you can easily get taken over on the stock-exchange
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Definition of limited liability
Where you and the business are not responsible for each other. You only lose the money you invested into the business
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Definition of a franchise
Where a firm gives the right to sell their products under their name for a fee
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Definition of a franchisor
The product manufactures
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Definition of a franchisee
The person selling the firms products
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What are the advantages of being a franchisor?
Increased market share, more likely to expand and saves money and costs due to economies of scale
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What are the disadvantages of being a franchisor?
You get a bad reputation if the franchisee is bad, there are high start-up costs and there is a risk of slow growth
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What are the advantages of being a franchisee?
They are establishing a good reputation business, less risk of faliure and you are more likely to get a bank loan
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What are the disadvantages of being a franchisee?
Have limited freedom, may be expected to pay for equipment, wages etc. and you are tied to suppliers
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What are the 7 business aims
survival, profit, growth, market share, environmental sustainability, customer satisfaction and ethical consideration
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Definition of an aim
An overall goal the business want to achieve
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Definition of an objective
The steps in order to achieve your overall aim
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What are the 2 forms of objective targets?
Non-numerical and numerical
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What is a numercial target?
Where you compare your targets against performance figures e.g. increase sales by 5% and profits by 10%
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What is a non-numercial target?
Targets that are either compared against the more thical thing to do or impact surveys
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Definition of a stakeholder
Anyone that has an interest in business. This can internal or external
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5 examples of a stakeholder
Employees, customers, government, local community, suppliers
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How do customers influence business?
If it can not sell products it can not make a profit
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How do employees influence business?
If they are unhappy to work the busienss will be unproductive
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How does the local community influence business?
If they do not like the busienss, who will they sell prodcuts to?
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Definition of a busienss plan
A plan that contains what the business wants to do and how it will achieve that
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What 7 things does a busienss plan contain?
Personal details, mission statement (broad aims), objectives, product description, staffing requirements and finance
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Why does a busienss need a business plan?
It allows possible financial investors to see if the business has a good chance of sucess to invest their money into the business
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What are the 7 location of prodcution factors?
Location of raw materials, transport, labour supply, economies of concerntration, communication links, location of market and government policy
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Other cards in this set

Card 2

Front

What is the biggest aim for new small businesses?

Back

To survive

Card 3

Front

What are 2 examples of a 'not-for-profit' organisation?

Back

Preview of the front of card 3

Card 4

Front

What do 'not-for-profit' businesses do with their profits?

Back

Preview of the front of card 4

Card 5

Front

Definition of a social enterprise

Back

Preview of the front of card 5
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