The Business Framework

A word used to describe the skills and personality of a person that makes them successful in business e.g. determined to succeed or confident.
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A person who takes the risk of starting and running a business. They will have enterprise skills which make them successful in business.
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Factors of Production or CELL
Resources that are essential for business- Capital, Enterprise, Land and Labour.
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Business Objectives
What the business is trying to achieve. This includes profit, growth, survival or providing a service. Objectives will vary from business to business and will change overtime.
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Mission Statement
A mission statement is a brief summary of the main objectives a business has.
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An individual or group of people who have an interest in a business including, workers, cusotmers, owners and the local community.
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Private Sector
The part of business activity owned by private individuals. This includes, sole traders, partnerships, private and public limited companies.
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Public Sector
These are business organisations that are controlled or ran by the government including health, education, fire service, police and post office.
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A form of business organisation which is a separate legal entity. It has limited liability and is owned by shareholders.
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A type of business organisation which has unlimited liability.
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Limited Liability
The owner of a business does not risk losing personal possession in order to pay off debts of the business.
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Unlimited Liability
If the business is unable to pay its debts, the owner's personal possessions or savings can be seized and used to pay the debts of the business.
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Separate Legal Entity
The business has a separate legal identify from its owners.
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A situation where the business is unable to pay its debts.
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Sole trader
A business is ran by a single owner who runs the business on their own however they can employ other people to help manage the business.
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A form of unincorporated business organisation which is owned by 2-20 members.
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Silent/Sleeping Partner
A person who has invested capital into a business but who does not take an active part in running the business.
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Deed of Partnership
A legal agreement drawn up between partners of the business stating the responsibilities of each partner e.g. how profits and losses are shared and how the business is to operate.
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Something that affects individuals and unincorporated businesses when liabilities are greater than assets.
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Private Limited Company
A business owned by a small group of shareholders. It sells shares to family and friends only. They are normally identified with the word 'limited' or 'ltd' somewhere in the name of the business and they are only responsible for their investment.
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Public Limited Company
A business owned by shareholders. It sells shares on the stock exchange to members of the public so they can have an unlimited amount of shareholders. Identified with the phrase 'plc' in their name.
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A payment made to shareholders from the profits made by a private or public limited company.
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The process of becoming a limited liability company.
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Registrar of Companies
The person responsible in the UK for maintaining records relating to the activities of private and public limited companies.
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Certification of Incorporation
Legal document issued by the Registrar of Companies allowing a business to trade as a limited liability business.
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Board of Directors
People elected by a group of Shareholders who represent their interests and make important decisions on how the company is operated.
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Annual General Meeting (AGM)
A yearly meeting of shareholders which will elect a Board of Directors and confirm the amount of dividend to be paid.
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Chair of the Board of Directors
The person who takes responsibility for managing the Board of Directors.
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Managing Director
The person responsible for putting into action the decisions made by the board of directors.
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Money usually raised through the sale of shares to investors.
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Issued Share Capital
The amount of share capital issued to investors.
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Minority Shareholders
Private individuals who only own a small percentage of the shares of a company.
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Major Shareholders
Shareholders who own a larger percentage of the shares used by a company.
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A marketing arrangement in which one business (the franchisee) buys the right to sell the goods or services of another business (the franchisor) and is allowed to use the franchisor's name, design, logos, processes, products and marketing ideas.
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The name given to the person or business who offers to franchise to other businesses its trading methods, products and business logo.
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The name given to a business or person buying a franchise.
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A payment made to the franchisor based on the sales revenue of the franchise.
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Social Enterprise
The name given to a business enterprise that is run for the benefit of this community with any profits that are made being put back into community projects.
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Are by people with a shared interest, to benefit all involved. Each participant has an equal say.
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Organisations that aim to raise money in order to support a cause, such as cancer research or wiping out poverty in third world companies.
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Voluntary Organisations
Provide a service to society e.g. animal welfare groups, wiping out poverty in third world countries, girls scouts, etc.
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What we need to survive e.e. food, water and shelter.
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What we would like but do not need for
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A place where buyers and sellers come together to trade. This could include websites or stores.
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Business Activity
Providing goods and services to satisfy consumer needs and wants.
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People who buy goods and services.
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Physical objects (tangible) that can be bought e.g. crisps, a bed, clothes.
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Non-physical things (intangible) that can be bought e.g. haircut, driving lessons
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All businesses in a chain of production are dependent on each other.
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Business Activity-Primary Sector
Extracting raw materials and natural resources from the land or sea e.g. fishing, farming, mining etc.
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Business Activity-Secondary Sector
Turning the raw materials from the primary sector into a product. e.g. wood to paper or wood to a chair.
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Business Activity-Tertiary Sector
This sector provides the customer with a good or service e.g. retailing.
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Chain of Production
The process by which a product starts as a raw material, goes through the secondary production and then is sold to the customers.
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Business Functions-Finance
Responsible for the money coming into and out of the business.
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Business Functions-Marketing
Responsible for establishing the potential demand for a product/service and for creating customer awareness of the availability of the product.
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Business Functions-Operations
Responsible for the production of the product which will involve production scheduling, ordering raw materials in order to maintain production and ultimately the finished product.
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Business Functions-Administration+ICT
Responsible for the paperwork side of the business which would include reception, management of incoming and outgoing post and compilation of the documents. Also responsible for delivery of computer training and maintenance of technological equipment
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Business Functions-Human Resources
Responsible for calculating the number of staff required, recruiting and selecting staff, training, motivation and health and safety.
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Why is a mission statement important?
It will make people remember the company and also persuade consumers to buy off their company. The mission statement will also convince customers and suppliers to buy off them.
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Business Aims
Aims are the long-term goals of the business. Businesses will try to achieve one or more aims. Aims should always be appropriate to the business activity and size of a business.
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Business Objectives
Objectives are stated, measurable targets of how to achieve the company's aims. If the business aim is tto expand, the objective might be to 'buy 15 new shops across England by December 2017.'
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SMART Objectives
Specific, Measurable, Achievable, Realistic, Time specific.
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Why are business objectives important?
They are the stepping stones to meeting the aims, employees have a clearer idea of what they are trying to achieve, objectives can motivate employees, the business can measure its progress towards meeting its aims.
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Conflicts in Objectives-Growth vs Profit
Expansion may be the managers main aim which might mean profits are reduced for a short period before they rise. The owners may want to see profits kept at a high level so there would be conflict there.
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Conflicts in Objectives-Growth vs Service
A business may be able to offer very good service because it is small and knows its customers well. With growth, it will lose its personal touch and service levels could fall.
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Why change from a Ltd to a Plc?
A limited company is difficult to expand so if they change to a plc. they will eventually have the resources to grow and expand. There is a chance to gain more shareholders which will increase the capital investment.
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Other cards in this set

Card 2




A person who takes the risk of starting and running a business. They will have enterprise skills which make them successful in business.

Card 3


Factors of Production or CELL


Preview of the front of card 3

Card 4


Business Objectives


Preview of the front of card 4

Card 5


Mission Statement


Preview of the front of card 5
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