Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

GCSE Business > 1.3 putting a business idea into practice > Flashcards

1.3 putting a business idea into practice Flashcards

1
Q

what are ways to compete with other businesses?

A
  • wider product range
  • lower prices
  • better design
  • higher quality
  • more convenient location
  • stronger brand image
  • better customer service
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what is product differentiation?

A

making products different from others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

why do businesses differentiate their products?

A
  • to target different market segments

- to gain an advantage over rivals when faced with competition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what is a competitive market?

A

when there is a large number of businesses compared to customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what may businesses do in a competitive market?

A
  • improve efficiency
  • find ways to improve competitiveness
  • differentiate its products/services
  • lowering its prices
  • giving customers special offers
  • cutting costs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what are the drawbacks of a highly competitive market?

A
  • lower prices in order to compete
  • accept lower profit margins
  • cut back on expenditure
  • be careful about how and when it expands
  • monitor its competitors
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what are aims?

A

general goals a business sets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what are objectives?

A

they are more specific than aims but contributes to achieving the overall aim. they will be financial or non financial

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what are examples of financial objectives?

A
  • profit

- market share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what are examples of non financial objectives?

A
  • independence

- customer satisfaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

why may aims and objectives differ between businesses?

A

due to different stages of development

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what is the formula for revenue?

A

REVENUE = PRICE X QUALITY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what are fixed costs?

A

costs that do not change

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what are variable costs?

A

costs that change directly with the number of products made

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is the formula for variable costs?

A

VARIABLE COSTS = COST OF ONE UNIT X QUANTITY PRODUCED

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what is total costs?

A

the total costs for a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what is the formula for total costs?

A

TOTAL COSTS = TOTAL FIXED COSTS + TOTAL VARIABLE COSTS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

a business sells 100 products
the products cost £5 per unit produced
the total fixed cost is £400
what is the total cost for the business?

A

100x5 (variable costs)=500

500(variable costs)+400(fixed costs)=£900(total costs)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

what is profit?

A

when a business is making money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

what is the formula for profit?

A

PROFIT = REVENUE - COSTS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what does profit allow businesses to do?

A
  • survive
  • expand
  • provide security/savings
  • reward employees
  • generate wealth
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

what is the formula for interest?

A

INTEREST (ON LOANS) = TOTAL REPAYMENT - BORROWED AMOUNT/BORROWED AMOUNT X100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

what is break even?

A

when revenue = total costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

what is total revenue?

A

the total money generated from sales in a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
what are the total costs?
the sum of all the costs
26
what are fixed costs?
costs that dont change is a business
27
what is margin of safety?
the amount of output between the actual level of output where profit is being made and the the break even level of output
28
how can you tell break even level from a graph?
it is where total costs and total revenue meets
29
what is the formula for break even points in units?
BREAK EVEN = FIXED COSTS/(SALES PRICE-VARIABLE COSTS)
30
what can break even analysis do?
it can identify strategies for lowering break even point and increasing profit
31
what is the formula for margin of safety?
MARGIN OF SAFETY = SALES - BREAK EVEN SALES
32
what is cash flow?
the money going in and out of a business on a day to day basis
33
what is a cash flow forecast?
predicts how cash will flow through a business over time
34
what is cash inflow?
money going into the business
35
what is cash outflow?
money going out of the business
36
what is net cash flow?
cash inflow-cash outflow
37
what is opening balance?
the money in a business at the start of the month
38
what is closing balance?
the money in a business at the end of the month
39
what is the importance of cash?
without cash a business would not be able to: - pay suppliers and debts - repay bank loans - pay wages to employees - buy raw materials - promote the business
40
what impacts on cash flow?
- change in sales revenue/demand - change in costs - seasonality in sales - business expansion or contraction - change in stock levels - credit terms can change
41
what is a negative cash flow?
when the cash outflows are greater than the cash inflows
42
why would a business need finance?
- paying for expenses - expanding the business - investing in new products and services - starting a new business - paying unforeseen costs
43
what is a short term source of finance?
finance that is paid immediately or quite quickly and are usually used to buy stock or pay the utility bill
44
what are long term sources of finance?
finance paid back over a long period of time and are usually used too finance a new business or to expand q business
45
what are two sources of short term finance?
1) Bank overdraft- covering short term expenses that can be paid quickly 2) trade credit- paying for stocks later
46
what are 6 long term sources of finance?
1) Personal savings- covering short term expenses 2) Venture capital- raising capital from investors 3) Loan- covering large expenses that will be paid back over a period of time 4) Retained profit- investing in a successful business 5) crowd finding- raising money from people for potentiall reward
47
why do businesses set aims/objectives?
- gives them a target to be measured - can motivate workers - aids decision making
48
fixed costs: 12,000 variable costs:120 selling price 180 what is the break even?
12,000/180-120=200
49
actual sales: 470 break even; 420 what is the margin of safety?
470-420=50
50
what are the advantages/disadvantages of an overdraft and definition?
``` a deficit in a bank account caused by drawing more money than the account holds advantages: -flexible -interest is only payed on the amount used disadvantages: -high interest -banks can ask for immediate repayment -banks can refuse an overdraft ```
51
what are the advantages/disadvantages of trade credit and definition?
Trade credit is the credit extended to you by suppliers who let you buy now and pay later advantages: -never run out of products to sell -can sell products before paying the supplier disadvantages: -the supplier may charge higher costs -supplier may say no
52
what are the advantages/disadvantages of personal savings and definition?
``` money owned by the entrepreneur that is put into a business advantages: -no interest -flexible -freedom disadvantages: -it is your own money ```
53
what are the advantages/disadvantages of venture capital and definition?
money put into a small business with high potential by a venture capitalist advantages: -can give starting money and strategies disadvantages: -lose control -you have to give a large share to the VC
54
what are the advantages/disadvantages of share capital and definition?
``` when someone puts money into a business in exchange for a share in the business advantages: -do not need to pay back money -no interest -attracts new finance -raises business profile disadvantages: -potential conflicts -loss of ownership ```
55
what are the advantages/disadvantages of loans and definition?
``` advantages: -negotiate terms -large amounts of money disadvantages: -deadlines -interest ```
56
what are the advantages/disadvantages of retained profit and definition?
retained profit is profit kept by a business to be used to pay costs advantages: -quick and easy to access -flexible disadvantages: -less likely to be available for start up businesses -might need for something else
57
what are the advantages/disadvantages of crowd funding and definition?
when a lot of people donate money to a business advantages: -promotes the business disadvantages: -lets your competitors know you need funds -may not attract other investors -may be a waste of time
58
advantages of break even analysis?
- helps understanding on who will invest in a business - you can calculate margin of safety - shows advantages of keeping fixed costs down - calculations are quick and easy
59
disadvantages of break even analysis?
- unrealistic assumptions - fixed costs vary when output changes - can only show one product at a time - can only be used as a planning aid - dose not take into account unforseen circumstances
60
how could a business cover negative cash flow?
- cut costs - arrange an overdraft - use a cheaper supplier - discount and promote - reduce waste - organize trade credit

GCSE Business (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions