1.4

• Define limited companies?

  Legal entities with limited liability, separate from their owners.
• Define a partnership?

  An unincorporated business which has 2 or more owners who share the risk.
• Advantages of a partnership?

  • larger capital
  • able to share workload
  • larger amount of skills
• Disadvantages of a partnership?

  • unlimited liability
  • possible disagreements
  • shared profit
  • legally responsible for others
• Define a sole trader?

  An unincorporated business which only has one owner.
• Advantages of being a sole trader?

  • quick and easy to set up
  • make own decisions over profit
  • own boss
• Disadvantages of being a sole trader?

  • unlimited liability
  • may be more difficult to raise finance
  • unincorporated
• Define unlimited liability?

  When any debts a business has will be the total responsibility of the owner.
• Define limited liability?

  If in debt, owner is only liable for the amount that they have invested personally into the business.
• What are the initials of a private limited company?

  Ltd
• Characteristics of an Ltd?

  • shareholders must be invited
  • not allowed to list on the stock exchange
  • minimum number of shareholders is 2
  • is usually a smaller business
  • not allowed to advertise their shares
• What are the initials of a public limited company?

  Plc
• Characteristics of a Plc?

  • public/ anonymous shareholders
  • usually larger businesses
  • allowed to list on the stock exchange
  • minimum number of shareholders is 7
• Advantages of limited companies?

  • limited liability
  • debt is shared amongst shareholders
  • easier to raise finance
  • continuity
• Disadvantages of limited companies?

  • overall control could be lost
  • legally obliged to publish accounts
  • more expensive to set up due to paperwork
  • accountable for shareholders
• Define a franchise?

  A business which gives the right to another person or business to sell goods or services using its name.
• Advantages of a franchise?

  • brand name is already established
  • access to established products and services
  • franchisor provides training
  • franchisor undertakes advertising and promotion
  • easier to get a loan
• Disadvantages of a franchise?

  • limited freedom for franchisees
  • having to pay royalties
  • initial start-up fees
• Factors influencing business location?

  • proximity to market
  • proximity to competition
  • property rent
  • parking
  • history and tradition
  • access to resources/ materials
  • labor availability
  • government regulations
• Define e-commerce?

  Any transaction that takes place through the internet.
• What are the 4 P's of the marketing mix?

  • product
  • price
  • place
  • promotion
• Give examples of methods of promotion?

  • loyalty cards
  • sales
  • BOGOF
  • celebrity endorsement
  • TV adverts
• What is the purpose of a business plan/ planning business activity?

  • minimizing risk
  • obtaining finance (to show a bank in turn for a loan)
• What is included in a business plan?

  • business idea
  • aims and objectives
  • target market of the business
  • cash- flow forecasts
  • marketing mix
  • location
  • sources of finance
• What are the 2 main influences on the marketing mix?

  • technology
  • competitive environment
• Influences of technology on the marketing mix?

  • undertaking of promotion via digital communication e.g social media adverts
  • wider geographical market
  • easier to compare prices to competitors
  • e-commerce
• Influences of competitors on the marketing mix?

  • lowering prices
  • increasing product portfolio
• Name pricing strategies?

  • skimming (very high prices slowly lowered over time)
  • cost plus ( pricing just enough to make a profit)
  • destroyer ( very low prices)
  • psychological (£9.99)
  • competitative
• Promotional strategies?

  • BOGOF
  • limited time offer
  • bundles
  • loyalty cards