Business revision first test

• List three methods of good customer service

  • Aftersale customer service
  • Quick and efficient service
  • Customer feedback
• What are the benefits of good customer service?

  • Customer satisfaction
  • Customers will be loyal and make repeat purchases
  • Customers will be more willing to pay more for a product or service
• What are the advantages of being ethical in a business

  • Ethical businesses can attract more investors.
  • Ethical businesses can build a positive reputation, which can lead to increased sales and profits.
  • Ethical businesses can attract and retain loyal customers.
• What are the disadvantages of being ethical in a business?

  • Ethical businesses may have a limited ability to maximize profit. 
  • It can be time consuming to implement ethical practices. 
  • Ethical practices can raise costs, such as the cost of Fairtrade products or improving worker conditions
• What are fixed costs?

  Costs that do not change, e.g: rent, insurance and property taxes
• What are variable costs?

  They are costs that can change with time, e.g: raw materials, utility expenses and labor costs
• What are employment laws?

   Laws protecting the rights of employees that employers must obey.
• What are the four areas of employment laws?

  • Pay
  • Employment
  • Discrimination
  • Health and safety
• What is consumer laws?

  Laws that protect consumers from poor-quality products, poor business operations and poor service.
• What is a PLC?

  A firm that is owned by shareholders, where anyone can buy shares and own part of the business.
• What are the advantages of forming a PLC?

  • the business has the ability to raise additional finance through share capital
  • the shareholders have limited liability
  • increased negotiation opportunities with suppliers in terms of prices because larger businesses can achieve economies of scale
• What are the disadvantages of forming a PLC?

  • It is expensive to set up, requiring a minimum set up cost of £50,000
  • There are more complex accounting and reporting requirements
  • There is a greater risk of a hostile takeover by a rival company as the company cannot control who buys its shares
• What is outsourcing?

  When a business hires another business to perform some of its activitiies, such as producing a product or providing a service.