Business studies

    Cards (128)

    • Entrepreneur
      A person who has the ability to spot an opportunity for a new business, has ideas, prepared to take risks
    • Enterprising
      Be able to spot a good business opportunity and have vision to make that business succeed
    • Characteristics of an entrepreneur
      • Willing to take calculated business risks
      • Have leadership qualities and planning skills
      • Prepared to take risks
    • Losing money if the venture fails
      Could lead to bankruptcy
    • Losing time if the venture fails

      That time is wasted
    • Rewards for the entrepreneur of risk taking
      • Making profits
      • Becoming famous
    • Why the government encourages enterprise
      • Reduces unemployment
      • Leads to economic development which generates wealth in the economy
    • Business resources
      • Land
      • Labour
      • Capital
      • Enterprise
    • How businesses start
      1. Decide on the product and produce a model or prototype
      2. Design a business plan
      3. Research the price any competitors are selling the product
    • Sizes of businesses
      • Micro
      • Small
      • Medium
      • Large
    • Private Sector business - a business owned by private people
    • Features of private sector businesses
      • Owned by private individuals
      • Financed by private individuals
      • Controlled by private individuals
      • Aim to make a profit
    • Forms of ownership in the private sector
      • Sole trader
      • Partnership
      • Franchise
      • Private Limited company
      • Public Limited company
    • Sole trader
      • The owner can keep all the profits made
      • The owner can make all the decisions without others' opinions
    • Disadvantages of a sole trader
      • They have unlimited liability which could lead to private possessions being sold
      • The amount of capital is limited, so their businesses are likely to be small
    • Advantages of a partnership
      • If one partner is ill or away then the business can stay open
      • The owners can discuss the problems which occur and make decisions together
    • Disadvantages of a partnership
      • Partners have to raise their own capital
      • The bankruptcy of one partner may cause the break-up of the business
    • Deed of partnership
      • States that the profits and losses are to be shared
      • States how the duties and responsibilities are to be shared
    • Ordinary shares
      Not guaranteed a dividend or share of the profit at the end of the year, depending on how successful the company was that year
    • Preference shares
      Guaranteed a fixed share of the profits before any payment is made to the ordinary shareholders
    • Ownership and control of the company
      • Shareholders
      • Board of directors
      • Managers
      • Employees
    • Main features of limited companies
      • Limited liability
      • Separate legal existence (incorporation) - separate from its owners
    • Documents needed to form a limited company
      • Memorandum of Association
      • Trading certificate
    • Advantages of a Private Limited Company (Ltd)
      • Limited liability
      • Amount of capital is more than sole trader or partnership
      • Control of the business is retained by a small group of shareholders
    • Disadvantages of a Private Limited Company
      • Expansion is difficult because shares are not available for the wider scale
      • Some of the financial information of a Ltd must be available for inspection by members of the general public which could give competitors valuable insights into the affairs of the company
    • Advantages of a Public Limited Company (Plc)
      • Shareholders have limited liability
      • They are very large with great influence in the market
    • Disadvantages of a Public Limited Company
      • The formation of it involves a lengthy legal procedure
      • The shareholders are the owners of the business but the directors and managers make all the decisions so the owners have no say in its running
    • Advantages of a franchise
      • The franchisee gains from having reduced risks and capital investment
      • The franchisee gains their right to be their own boss
      • The franchisor gains increased opportunities for expansion
      • The franchisor gains a percentage profit from all sales in that particular shop
    • Disadvantages of a franchise
      • The franchisee loses the right to sell the business without approval from the franchisor
      • The franchisee loses the right to buy stock from other sources which may be cheaper
      • The franchisor loses management of the day-to-day running of the shop, which may damage the reputation of the franchise if the local service is bad
    • Franchisee
      Person who buys the franchise
    • Franchisor
      Person who owns the franchise
    • Features of public sector ownership
      • Owned by the country
      • Financed by the government
      • Controlled by the government
      • Aim to give a service
    • Municipal undertakings
      • Run by local authorities/councils
      • Street cleaning
      • Local housing
      • Health and environment services
      • Parks and recreational facilities
    • Main sources of finance for municipal undertakings
      • Government grant
      • Rates
      • Charge for the activity
    • Social enterprise
      An organisation that marries the social mission of a non-profit programme with the market-driven approach of a business
    • The work of a social enterprise
      • To provide employment
      • To solve an environmental problem
      • To provide a sense of community
    • Influences on business location
      • Proximity to raw materials
      • Proximity to markets
      • Availability and price of land
      • Government influences
      • Communications
      • Parking
    • Business aims and objectives
      SMART: Specific, Measurable, Attainable, Realistic, Timed
    • Mission statement
      Sets out the purpose of the business and how the business will carry out its activities
    • Business aims
      • Survival
      • Profit and turnover
      • Growth
      • Corporate image
      • Concern for the environment
      • Social responsibility