1.4 Making business effective Flashcards
Bankrupt
When an individual is unable to pay their debts, even after all personal assets have been sold for cash.
Limited liability
Restricting the losses suffered by owners/shareholders to the sum they invested in the business.
Private limited company
A small family business in which shareholders enjoy limited liability.
Sole trader
A business run by one person who has unlimited liability for any business debts.
Unlimited liability
Treating the business and the individual owner as inseparable, therefore making the individual responsible for all the debts of a failed business.
Franchising
Paying a franchise owner for the right to use an established business name, branding and business methods.
Royalties
Percentage of the sales revenue to be paid to the overall franchise owner.
Entrepreneur
A person who sets up a business and takes on financial risks in the hope of profit.
Product
Targeting customers with a product that has the right blend of functional and aesthetic benefits without being too expensive to produce.
Fixed premises
Buildings that have to be where they are such as on the high street whereas e-commerce buildings can be located anywhere.
Proximity
Nearness. Whether or not a business wants to be close to a factor such as materials.
Place
How and where the supplier is going to get the product or service to the consumer, it includes selling products to retailers and getting the products displayed in prominent positions.
Price
Setting the price that retailers must pay which in turn affects the consumer price.
Promotion
All the methods that a business uses to persuade customers to buy such as branding, packaging, advertising to boost the long-term image of the product and short-term offers.
Business plan
A detailed document setting out the marketing and financial thinking behind a proposed new business.
