Business Activity

• Business Activity what are services? Services are non-physical actions performed by a business to help a customer.
• Custom Study Session what are goods? Goods are physical products such as a PlayStation console or Coca Cola soft drinks
• Business Activity What is B2B and B2C? Some businesses sell products or services to consumers (B2C – business to consumer) while others sell to other businesses (B2B – business to business).
• Custom Study Session What are customer needs? Customers' needs are the things that people can't live without.
• Business Activity What are customer wants? These are the products and services that customers don’t need but would like to have.E.g. television and jewellery.
• Custom Study Session What is a primary sector? The primary sector produces raw materials. These are natural resources that can be used to make products or provide services.Natural resources can be:Extracted from the ground like oil, coal and gasCollected like trees in the forestry industryGrown like crops in the farming/agriculture industry
• Custom Study Session What is the secondary sector? The secondary sector manufactures goods.This is the next stage of the supply chain.Businesses in this sector turn raw materials into finished goods.E.g. A paper manufacturer makes paper out of wood collected by the forestry/logging industry.
• Custom Study Session What is the tertiary sector? These services can take a wide variety of forms and can exist to serve customers, businesses or a combination of both.A simple example is the healthcare industry, which provides a wide range of healthcare services to people.Another example is Facebook, which provides a social media service to customers while also providing an advertising service to businesses.
• Custom Study Session What is an entrepreneur? An entrepreneur is someone who takes on the risk of enterprising activity.
• Custom Study Session What is an enterprise? an enterprise is another name for a business or organisation eg. Snap Inc.
• Custom Study Session What is the economy? The economic situation describes how well the country and world’s overall economy is performing.
• Custom Study Session What is legislation? Some industries are heavily impacted by laws (also known as pieces of legislation).When legislation (the law) changes, businesses can be forced to change their practices.
• Custom Study Session What is the business environment characterised by? Legislation, the economy, technological advancements, environmental expectations, business competitors
• Business Activity What are the risks for entrepreneurs starting a new business? Risk of failure financial loss, lack of security
• Custom Study Session Wht are the 4 factors of production? Labour, land, enterprise capital.
• Custom Study Session Define a 'sole trader' A sole trader is a single person who is the exclusive owner of a business. They can still have employees and the owner is entitled to keep all of the profits after tax, but is also personally liable for the business’ debts.
• Business Activity List the advantages of being a sole trader: They are the easiest type of business to set up.The sole trader gets to be their own boss.The sole trader decides what to do with the profit.
• Business Activity List the disadvantages of being a sole trader: Unlimited Liability It can be hard to raise finance. All the responsibility for making business decisions is yours. It can be harder to retain (keep) good employees as they aren’t necessarily given a share of the profits.
• Custom Study Session Define the term 'partnerships': Partnerships are businesses that are owned by 2 or more partners. Each partner has an equal share of the profits and equal say in the decision making process.
• Custom Study Session List the advantages of being in a partnership: More people means more experience and more ideas. Decisions can also be better as the owners can discuss pros and cons with each other.It is easier to raise money because banks are more likely to lend to a partnership than to a sole trader. More investments means increased access to finance for the firm and this supports quick growth.Good employees can be made into partners and this means it is easier to retain the best employees.
• Custom Study Session List the disadvantages of being in a partnership: The profits are shared.Unlimited liability.Partners may disagree about business decisions, leads to conflict and disagreements.Each partner is liable for the actions of the other partners.
• Custom Study Session What is a limited company and state the 2 types of it: Limited companies are businesses that are owned by shareholders. There are 2 types of limited company: private and public.
• Custom Study Session Do partnerships and sole traders have limited or unlimited liability? Unlimited liability, this means that if the business goes bankrupt, the business owner(s) will have to make up for the business debt by giving up personal possessions and money.
• Custom Study Session Do public and privated limited companies have limited or unlimited liability? Limited liability, which means that if the business goes bankrupt, shareholders are only responsible for the amount the have invested in the business (personal possessions are not given up to make up for the business debt).
• Custom Study Session Define limited liability if the business goes bankrupt, shareholders are only responsible for the amount the have invested in the business (personal possessions are not given up to make up for the business debt.
• Custom Study Session Define unlimited liability the business goes bankrupt, the business owner(s) will have to make up for the business debt by giving up personal possessions and money.
• Custom Study Session What are privated limited companies (LTDs)? Companies where ownership of shares is restricted. For the company to sell shares, all the current shareholders must agree to sell them. These companies have Ltd, after their name.
• Custom Study Session State the advantages of private limited companies (LTDs) Shareholders have limited liability.The fact that ownership is restricted means that all shareholders must agree to sell shares. This means that the owners retain (keep) a lot of control over how the business is managed.It is easier for a limited company to get a loan, this increases a companies access to finance.
• Custom Study Session State the disadvantages of private limited companies (LTDs) Finance is needed to incorporate a business. There is an upfront fee as well as costs associated with paperwork. This means that it may not be possible for smaller firms (or brand new firms).Unlike sole traders and partnerships, the company is legally obliged to publish their accounts each year and competitors may use these to become more competitive.
• Custom Study Session What are public limited companies? Public limited companies sell shares on the stock exchange. This means that anybody over 18 can buy shares (often through brokers). Firms often become public companies when they want to expand because selling shares on the stock exchange allows them to raise finance for investment.
• Custom Study Session State the advantages of public limited companies: Selling shares on a stock exchange allows companies to raise money for investment, which enables the company to grow faster or bigger.It is much easier for companies to raise capital (money) from banks if they are public limited companies because they present less of a risk (given the number and size of investors).Shareholders have limited liability because the company is incorporated.
• Custom Study Session State the disadvantages of public limited companies: Owners often have very little say over how the business is run. This means that it can be hard to agree on how the business is run.Anyone can take over the company if they are able to buy enough shares. When shareholders own more than half the shares, then they will have control over the company.The company’s accounts must been made public. This means that competitors can see how well the company is doing.
• Custom Study Session What are not-for-profit organisations? Any profit made by not-for-profit organisations is reinvested (put back) in the business. Any profit cannot be kept by the owners.
• Custom Study Session What are the different types of not-for-profit organizations? There are lots of types of not-for-profit organisations and they can have different aims: Charities- Getting charitable status lets a business get tax relief and lets it apply for certain grants. For a business to get charitable status, they must follow rules and regulations. Social enterprise- They are more similar to for-profit businesses in that they make a surplus through selling goods or services. This profit is reinvested to support the social enterprise’s aim. Unincorporated association- Not-for-...
• Custom Study Session what does Smart stand for in business aims and objectives? Specific, Measurable, Agreed, Realistic and Timed
• Custom Study Session What are business aims and objectives? An aim is an ultimate purpose. An objective is a goal that is sought in order to achieve an aim.
• Custom Study Session State the main types of business aims: survival, profit maximisation, growth, market share, customer satisfaction, social/community and ethical and environmental
• Custom Study Session What are the roles of objectives in running a business? Objectives set targets for particular aims that a company wants to achieve. Objectives are more specific than aims. Once the management of a business have set its overriding purpose or aim, they must then define the business objectives. This includes: Objective to profit maximise; Objectives are measurable targets.
• Custom Study Session What is market share? Market share is the percentage of sales that a company makes relative to all the sales made in that market.
• Custom Study Session What are the three key factors that influence a businesses objectives? The size of a business; the level of competition; type of business.