Business

• What are the 4 factors of production?

  land, labor, capital, entrepreneurship
• What is land in production?

  all natural resources used during production such as: oil, coal, the sea, and the land itslef
• What is Labour in production?

  human resources used during production: including all the staff and managers who work for the organisation
• What is Capital in production?

  All man-made resources used during production such as: machines, tools, and factories
• What is enterprise in production?

  The individual/group that brings together all the other factors of production known as the entrepreneur. They are risk takers they can lose everything if their idea doesn't work
• What are tangible items?

  Things we can see and touch
• What 2 types of goods are there?

  Durable and Non-Durable
• What are durable goods?

  Items we can use repeatedly e.g laptops, phones. They usually have an expectancy of at least 3 years
• What are non-durable goods?

  goods that last less than three years and we can onlu use once eg food, drink, newspapers
• What are the 3 sectors of industry?


  primary, secondary, tertiary
• What is the primary sector?

  businesses that are involved in exploiting/collecting natural resources. It includes workers who work through agriculture, mining, fishing, and forestry
• What is the secondary sector?

  It includes workers that are manufacturers. When we take natural resources and change them into things we can use eg cars and houses.
• What is the tertiary sector?


  Businesses that are involved in providing the customer with a service, rather than just selling a good. eg banking and tourism
• What will customers do if they are happy with the service?

  - Continue to use the firm through repeat custom

  - Allow the firm to maximise sales and profits by purchasing more

  - allow the firm to increase its market share

  - Provide constructive feedback about the firm

  - Give the firm a good reputation

  - Potentially be prepared to pay a higher price
• How can firms ensure customer satisfaction?

  - Provide a high quality product that is value for money

  - Have well trained staff who are knowledgeable about the product

  - Have staff that deal with customer requests quickly

  -have an after-sales service e.g so that customers can ask questions once they have bought the product

  - actively seek feedback from customers and be seen to follow up on negative feedback

  - have a customer complaints procedure, so that people know how to go about making a complaint/ getting a refund

  -ensure that customers are actively updated on the progress of a complaint
• How can firms measure customer satisfaction

  Feedback forms

  Survey

  Have sales/profits increased

  A reduced number of complaints

  Ratings and comments on TripAdvisor/ other social media
• When starting an business where can you go for help/feedback

  Bank, Government, Lawyers, Local estate agents
• What is the prince's Scottish youth business trust?

  -Gives support and advice through mentors

  - Assists with business plans which new businesses need

  - Give legal advice about business law

  -Provide training courses

  - Provide network opportunities
• What are the 3 Sectors of the economy?

  Private, public, third
• What is the aim of private sector organisations

  To maximise sales and profits and increase market share
• What are common types of private business organisations

  Sole traders

  partnerships

  Limited companies
• What is a sole trader?

  A business owned by one person eg small shops, hairdressers and trades
• What are advantages of being a sole trader

  -Doesn't require a lawyer to set up

  - The owner makes all the executive decisions

  - The owner keeps all the profit to themselves
• What are disadvantages of being a sole trader

  - Unlimited liability

  - Harder to raise money to start up/grow the business

  - Lots of pressure on one person

  - Nobody to cover if owner becomes ill or takes time off

  - Owner may lack expertise in business fields
• What is a partnership?

  a business owned by two or more people
• What is a partnership agreement?


  Legal document that clearly defines how the work, responsibilities, rewards, and liabilities of a partnership will be shared by the partners.
• What are some advantages of a partnership?

  Two or more owners so work is shared

  More capital available

  Partners can specialise in certain areas

  A partner can bring additional expertise
• What are some disadvantages of a partnership?

  Unlimited liability

  Arguments could arise

  Profits must be shared

  Partnership dissolves when one partner dies or wishes to sell

  Difficult to transfer ownership as partnership agreement must be rewritten
• Who owns a Private Limited Company?

  shareholders
• What are dividends?


  a sum of money paid regularly by a company to its shareholders out of its profits
• What is limited liability?

  If the company falls into debt you only pay back what you invested in the business
• What is unlimited liability?


  The owner is personally and fully responsible for all losses and debts of the business and could lose personal items eg house, car etc
• Who are private limited companies run by?


  A director or board of directors
• What are some advantages of a private limited company?

  -Shareholders must have limited liability

  - The control of the company is not lost to uninvited outsiders

  - Significant experience and expertise is available from shareholders and directors

  - Accounts are published for shareholders and HRMC only
• What are some disadvantages of a private limited company?

  -Profits must be shared

  -Lengthy legal process in setting up the company

  - Shares cant be sold to the public which makes raising finance a more difficult process

  - Firms have to abide by the requirements of the Companies Act and submit information and accounts to companies house
• What is the aim of the public sector?

  Set up and owned by the government on behalf of the tax-paying public. The main aim is to provide the highest quality of service to the general public
• What are the aims of third sector organisations?

  Designed not to make a profit. Formed to provide a quality service to their local community e.g Brownies, Hillwalking groups etc
• What are the aims of charities

  To maximise donations to support good causes.

  To be recognised as a charity the organisation has to have one or more of the following objectives: To relieve poverty, To advance education, to advance religion
• What is a social enterprise?

  A business that aims to tackle problems, improve the environment or life for the community
• What are some types of social enterprise?

  Social firms- Providing unemployment to disabled and disadvantaged people

  Credit Unions- used to provide finance to people who find it difficult to access traditional lending sources eg banks

  Co-operatives- where the business is owned by employees and/or customers

  Housing associations- providing low cost accommodation to rent and buy