Business Paper 1

• Definition of a stakeholder


  Individuals or groups of people who have an interest in a business.A stakeholder has big influence on the business as they can be affected by the decisions they make
• Different types of technology used by business is?

  e-commerce,social media,digital communication and payment systems
• What is the marketing mix.

  Price,Promotion,Place and Product
• How does technology influence business activity.

  Sales,Cost and marketing mix
• What is consumer law.

  Acts of parliment that are intended to protect consumers from misleading or dangerous practices by companies
• What is employment law

  parliment passes laws to protect employees from being exploited at work.
• Principles of employment law

  Recruitment ,Pay Discrimination and Health and Saftey
• Negatives of legistation


  Time consuming and expensive and rules can restrict creativity and initiative
• What are the main external influences on a business.

  Technology,legistation and economic climate
• sources of finance are...

  Bank loan

  overdraft(short term)

  venture capital

  trade credit(short term)

  crowdfunding

  retained profit

  share capital
• Positives and Negatives of bank loan


  +Longer repayment

  +not personal money

  +access to more money

  -Interest

  -Must pay back more than you get
• Positives and negatives of overdraft


  +Quick and Easy

  +Time to repay

  -Limited

  _smaller cash avaliable
• Positives and negatives of share capital

  +You can gain lots of money quickly without buying interest

  -Lose control of business

  -"Dividends"-profit paid to shareholder
• Venture capital positives and negatives


  +You gain experience from an experienced individual

  -Disagreements/Losing control
• Trade credit positives and negatives

  +Easy to set up

  +Attracts potential buyers

  +Helps cash flow

  -High risk of bad debt

  -Difficult to maintain credit

  -Limited buying options
• Crowdfunding positives and negatives


  +quick,tests market demand

  -relying on people being generous
• Positives and negatives of retained profit


  +No loss of personal money

  +quick and convenient

  -unhappy shareholder as no dividens is paid

  -Profit can be misused
• What is the difference between goods and services

  Goods=They can be touched felt and held

  Services=They are provided by other people of businesses
• What are the main customer needs

  Price

  Choice

  Quality

  Convenience
• What does market research tell us?

  The Market

  Competition

  customers

  Market segment
• What is the difference between Primary research and Secondary research

  Primary research is data that is collected first hand for a specific purpose

  Secondary research is data that already exists that has been collected for a different purpose
• Examples of primary research

  Surveys Questionaiires and Observations
• Examples of secondary research

  Internet,Newspapers and Sources
• What is Quantitative data and Qualatitve data

  Quantitative is normally numerical

  Qualaititve is normally based on opnions and beliefs eg.focus groups
• What is a Market map

  A market map illustrates a range of positions a product can take in a market based on two dimensions that are important to a customer
• What is market segmentation

  Market segmentation involves dividing the market into parts that reflect different customer needs and wants
• What are the three ways to segment a market

  Demographics

  Income

  Location
• What is breakeven


  Breakeven is the output at which the total revenue is EQUAL to the total costs
• What is the Margin Of Safety


  The Margin of Safety is the amount of sales that can fall before a business can hit breakeven
• What strengths should a competing business must have

  Price ,quality, location ,product range and customer service
• Name 3 financial aims a company might have

  1.Profit

  2.Sales

  3.Financial Security
• Name 3 non financial aims a business might have

  1.Social objectives

  2.Independence

  3.Control
• Why could CASH be important to a business


  1.To pay suppliers,overheads and employees

  2.To prevent business failure
• What is limited liability


  Limited liability is when the debt for the business is limited for the owner.They are not responsible for debt.
• What is unlimited liability


  This is when the business debt now falls onto the owner and they are responsible for it now.
• What are the 4 types of business ownership

  1.Sole trader

  2.Partnership

  3.Private Limited Company(plc)

  4.Franchising
• What are the advantages and disadvantages for a sole trader

  Advantages:

  Can start trading immediately

  Have 100 percent control

  Disadvantages:

  Unlimited liability

  100 percent responsibilty of the business,making holiday or fixing a problem
• What are the are the advantages and disadvantages of having a partnership

  Advantages:

  Liability is spread between partners

  Complementary skills may enhance the business

  Disadvantages:

  Unlimited liability,including for debts obtained from other partner

  Possible clashes due to different ideas
• What are the advantages and disadvantages of a PLC

  Advantages:

  Limited Liability

  Can sell shares to outside investors

  The business can continue even if owner dies as shares can be passed on

  Disadvantages:

  Risk of losing control
• Advantages and disadvantages of franchising

  Advantages:

  1.The franchisee can pay into advertising which can advertise a franchise nationally,perhaps on TV

  2.Franchises have a lower failure rate as they have tested method to run the business,meaning banks are more willing to lend money

  Disadvantages:

  They have to pay royalty payments to the franchisor,normally a percentage of revenue

  Initial fee for the business is quite expensive