(1)Introduction To Business Flashcards
(34 cards)
What are the characteristics of an entrepreneur?
- hardworking
- competent
- reliable
- diligent
- enthusiasm
What are the four factors of production?
Land, labour, capital and enterprise
What is value added?
What a business ensures it has when it charges consumers more than the cost of that product or service to consumers
What is another word for business functions?
Departments
What is chain of production?
Stages that a product passes through until it reaches the final consumer
What are the different business sectors?
Primary - businesses in the primary sector are concerned with the extractive industries
Secondary - manufacturing
Tertiary- output of services
What is deindustrialisation?
The decline in the secondary sector of the economy.
What is private sector and public sector?
Private - businesses owned by private individuals - run for profit
Public - owned and run by the government - provides a service
What is a sole trader?
- business that is own and run by the sole trader - the business does not exist in its own right - its unincorporated
What are the advantages of of being a sole trader?
- few legal requirements
- financial information kept private
- cannot be subject to takeovers
- keeps all profit
- decision making power is kept with the owner
What are the disadvantages of a sole trader?
- unlimited liability
- hard to raise capital and expand
- no continuity
What is a partnership, what are some advantages and disadvantages of operating as a partnership?
- when two or more people run a business together.
Advantages - easy to establish
- more capital
- losses are shared
- share of expertise and ideas
- workload is spread
Disadvantages- unlimited liability
- decision making process is slower
- profits are shared
- lack of continuity
What is a deed of partnership?
Legal document that clarifies matters such as - how much money each partner contributed and take from the business, duties, arrangements on taking new partners on etc.
What is a limited liability partnership?
An LLP has separate legal identity to owners - it has limited liability
What are the characteristics of a limited company?
- incorporation
- shares
- limited Liability
What are the advantages of companies?
- access to large amounts of capital through shares
- limited liability
- less risky
- continuity
What are the disadvantages of companies?
- expensive to set up
- more complicated to run
- company accounts are not private
- danger of takeover
- requires more complicated management structures
What is the third sector?
Includes charities and community groups they are not owned by the government but are not run for profit.
What is a franchise?
Where a business with a well known brand name lets a person or group of people set up their business under the name of that brand.
What are the advantages for the franchiser?
- firm doesn’t have to spend large amounts in order to expand
- products are under their control
- applicants are carefully chosen
What are the disadvantages for the franchiser?
- control issues
- cost of supporting the franchisees
- possibility of conflict
- reputation damage
What are the advantages for the franchisee?
- using a tried and tested brand name
- specialist advice
- easier to obtain a loan from a bank
What are the disadvantages for the franchisee?
- supplies have to be bought from the franchiser
- royalty payments
- has no control over what its selling
Cannot be sold without the franchisers permission - fixed period of time
What is a co-operative?
Business owned and run by its members. Profits are shared between embers rather than being distributed to shareholders.
