1.4 Flashcards
(31 cards)
Define location
The place where the firm decides to site its operations
What are the key factors to consider when choosing a location
Convince for customers, availability of staff, cost of premises, infrastructure, access to support services
What is the impact of location for a business
Shops and restaurants need to be conveniently located, delivery / manafacturing business need good infrastructure,
What are the influences of internet on location
Reliability and speed of broadband is important, businesses can save money through growth of online selling, online banking, SMART phones, staff can work remotely
Define liability
The state of being legally responsible for something
What is unlimited liability
The owner of the business being legally responsible for all the debts of the business
YOU CAN LOSE MORE THAN YOU PUT IN
What is limited liability
The owner of the business only having part responsibility for the debts of the business
YOU CAN ONLY LOSE THE AMOUNT OF MONEY YOU PUT IN
What is a sole trader
One owner who makes all the decisions for the business and keeps all the profits
What is a partnerships
More than one owner making the decisions and sharing the profit
Wha are private limited companies
Company’s where the owners (shareholders) have a separate legal identity to the company
What are the Advantages of being a sole trader
Keep all profits, make own decisions, quick and easy to set up, decide own working hours
What are the disadvantages of being a sole trader
Unlimited liability, heavy work load, harder to collect source of finance
What are the advantages of a partnership
Share risk. Wider expertise, easier to raise finance and grow
What are the disadvantages of a partnership
Disagreements, share profit, decisions by one partner can effect everyone, unlimited liability
What are the advantages of a private limited company
Limited liability, higher prestige, more finance options, more flexibility, introduce managers
What are the disadvantages of private limited company
Share profit, lose control, publish accounts, disagreements with shareholders
Define franchise
Running a business using the name of another (well established) business
Define franchisor
The well establishes business allowing others to use their name
Define franchisee
The small business taking on someone else’s name
What are the advantages of running a franchise
Customers may be loyal, support and training provided,brand is already established
What are the disadvantages of running a franchise
Initial investment costs can be high, have to pay a fee or royalty to franchisor, lack of freedom, franchisor can withdraw franchise at any time
Name the marketing mix
Product, price, promotion, place
What does price include
Discount, payment plan, retails competition prices, credit terms, cost of material
What does place include
Online selling, delivery, retail locations, distribution, vending machine
