BUSINESS STUDIES Y11

Cards (143)

  • What are the four resources that are used in the production of goods and services? Land, Labour, Capital and Enterprise
  • Labour refers to people who work in an organisation or business
  • Capital is money invested into a business by shareholders
  • Enterprise is organising the capital, labour and the land into the correct proportions
  • Land is natural resource which includes land, water, minerals etc.
  • what does marketing mix mean?

    deals with the way a business that uses Product, Price, Place, Promotion.
  • Price - how much it costs
  • Place - where the product can be bought from
  • Product - what the customer buys
  • Promotion - advertising to promote sales
  • Franchisee - a marketing method to set up a business. Gives the person an opportunity to sell well-known set of products but without risks attached
  • franchisor - company that sells the rights to use their name
  • Primary market research involves collecting information directly from consumers or potential consumers through surveys, questionnaires, interviews etc.
  • Secondary market research uses existing data such as government statistics, trade publications, competitor websites, social media sites etc.
  • Market research is used by businesses to find out about customers, competitors and trends.
  • why do people start a business?
    • they have an idea and have spotted a gap in the market
    • they want to be their own boss
    • they have the drive/passion
    • they want to pursue a hobby or personal interest
    • they have the money
    • they want to make more money
  • what is an entrepreneur?

    an individual who sets up a new business and has the skills needed to make it a success.  Someone who is willing to take risks to achieve business success.
  • what does it mean to be enterprising?
      
    be able to spot a good business opportunity and to have the vision and drive to make that business succeed.  
  • why does the government encourage enterprise?
    • to reduce unemployment
    • stimulate economic growth
    • people feel motivated
  • characteristics of an entrepreneur?
    • creative
    • leadership qualities
    • good communication skills
    • good planning skills
    • productive
    • showing initiative
  • what are some risks of risk taking?
    • loosing money- if the product doesn't become successful money will be lost and the entrepreneur could become bankrupt
    • losing time- entrepreneurs will have spent a lot of time designing an idea and planning the business. If this fails time will have been wasted
    • personal stress- entrepreneurs will worry the new idea may not be successful and become stressed working long hours
  • what are the rewards of risk taking?
    making profit- if successful, a business can sell lots of products and earn large amounts of profit for the entrepreneur. Successful business may be sold for large sum of money
    becoming famous- lots of successful entrepreneurs have become household names eg. Donald trump, lord sugar and Richard Branson
    independence- some people want to make all the decisions and be their own boss. The independence is a reward to risk taking
  • what is labour?
    this refers to the human resource in the business. The workers who are employed to manufacture the product or provide a service. The labour may be physical or mental.
  • how do businesses start?
    • design business plan
    • decide on the product and produce a model or prototype
    • study market to see if there are already similar products available
    • research price at which any competitors are selling the product
  • what are the sizes of a business?
    • micro= 1-9
    • small= 10-49
    • medium= 50-249
    • large= more than 249
  • what are the features of private sector businesses?
    • owned by private individuals
    • financed by private individuals
    • controlled by private individuals
    • aim to make a profit
  • what is a sole trader?
    A sole trader is their own boss, they have unlimited liability to pay of their debts and provide for the entire capital
  • what are private sector forms of ownership?
    • partnership
    • sole trader
    • franchise
    • public limited company
    • private limited company
  • advantages of sole trader
    • you are your own boss
    • you have maximum privacy
    • you keep all profits
    • you can make all decisions
    • start up costs are low
  • what are disadvantages of sole trader?
    • hard to raise money from other sources eg. bank
    • business is very dependent on owner this might require long hours to be worked
    • normally have limited capital to set up the business
    • they are responsible for all losses in the business
  • what is partnership?
    most commonly found in jobs like dentists, doctors, surgeons etc. Consists of 2 or more people and maximum of 20. They have limited liability
  • advantages of partnership
    • two heads are better than one
    • more capital available for business
    • your business is easy to establish and start up costs are low
    • have greater borrowing capacity
  • disadvantages of partnership
    • higher taxes
    • emotional issues
    • lack of stability
    • splitting of profits
    • risk of conflict and disagreements
  • what does deed partnership state?
    • how profits and losses are to be shared
    • whether interest on capital is payable
    • how duties and responsibilities are to be shared
    • how new partners might be introduced to the firm
  • what is a shareholder?

    An individual or entity that owns shares in a company and has a financial interest in its success.
  • ordinary shares

    not guaranteed a dividend at the end of the year. Getting dividend depends on how successful the company has been during the year
  • preference shares

    less common and safer as they are guaranted a fixed dividend out of the profits before any payment is made to ordinary shareholders
  • what is limited liability?

    people who invest in the company can only lose the amount of their investment
  • what is private limited company?

    a private company that its shares cannot be bought by members of the public. Instead, shares in a LTD are held by a small group of people who are able to keep control of the business.
  • advantages of private limited company?
    • Larger amounts of capital available than sole traders and partnerships
    • Larger businesses can benefit from economies of scale. eg. bulk- buying
    • Limited liability-debts of the business are limited to the amount invested by the shareholders and personal assets are not at risk