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Business GCSE > 1.4 - Making The Business Effective > Flashcards

1.4 - Making The Business Effective Flashcards

(55 cards)

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1
Q

What are sole traders?

A

Have just one owner
(Thhough the owner may employ others to work for them)

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2
Q

Which businesses are most likely to be sole traders?

A

Small businesses

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3
Q

What are examples of sole traders?

A

Plumbers
Hairdressers
Newsagents
Fishmongers

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4
Q

What are the advantages of sole traders?

A

Easy to set up - great for start up businesses
Get to be your own boss
You get to decide what happens to any profit

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5
Q

What are the disadvantages of sole traders?

A

Long hours, Not many holidays
Business doesn’t have its own legal identity - if they sue you, they sue you personally
Unlimited liability
Hard to raise money - bank see sole traders as risky so it might be hard to get a loan

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6
Q

What is unlimited liability?

A

It means you are liable (legally responsible) for paying back all of the business’s debts if it goes bust. As you are not legally separate from the business, your personal finances are at risk

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7
Q

How partners do partnerships generally have?

A

2 - 20

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8
Q

How is responsibility distributed within the partnerships?

A

Each partner has an equal say in making decisions and an equal share of the profits - unless they have an agreement called a deed of partnership that says different

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9
Q

What are the advantages of partnerships?

A

More ideas, range of skills and expertise
More people to share the work
More capital (money) put into the business so it can grow faster

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10
Q

What are the disadvantages of partnerships?

A

Each partner is legally responsible for what all the other partners do
Unlimited liability
More disagreements
Profits shared between partners - less for individual partners themselves

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11
Q

What 2 types of limited companies are there?

A

Public
Private

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12
Q

How are limited companies different from sole traders?

A

A limited company has its own separate identity: money/property/bills belong to the company not owners
Limited liability - company liable, not owners
Owned by shareholders

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13
Q

What are private limited companies?

A

a small business entity that’s privately owned and doesn’t trade on public exchanges

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14
Q

What are public limited companies?

A

a business structure where shareholders own the company and directors manage it

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15
Q

Whay are the advantages of prv ltd companies?

A

Limited liability - you can’t lose more than you invest
Easier to get a mortgage/loan

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16
Q

Whay are the disadvantages of prv ltd companies?

A

More expensive to set up - legal paperwork
Legally obliged to publish its accounts

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17
Q

What are accounts?

A

A place to record transactions occuring within a business

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18
Q

What is a franchise of a company?

A

Where they sell the products or use trademarks (logos) of another firm. They then give the firm they’re franchising from a percentage of their profits

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19
Q

What are franchisors?

A

Product manufacturers

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20
Q

What is a successful example of franchising?

A

Big firms in the Fast food industry

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21
Q

Advantages of franchising

A

Customers will recognise brands - more likely to buy from franchise
Less risky starting from scratch - easier to get a loan

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22
Q

Disadvantages of franchising

A

Franchisor may set Strict rules about what businesses can sell and how it can operate - limited freedom
Franchisee usually has to pay a lot of money to start franchise and make regular payments to fronchisor

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23
Q

Franchisee

Study These Flashcards
A

A person who purchases the right to use an existing business’s trademarks, brands

24
Q

What 5 factors is location of a business influenced by?

Study These Flashcards
A

Location of raw materials
Labour supply
Competition
Location of the market
Using the internet

25
What influences a business when choosing a location?
Nature of the business Relies customers visiting Being close to market Manufacturing firm might prioritise close to raw materials
26
Why would a business want to consider location of raw materials when deciding a location for their business?
A manufacturing business - would want to be closer to raw materials (lower transport costs)
27
Why would a business want to consider labour supply when deciding a location for their business?
If location is near an area of high unemployment, wages will be low Good selection of people to choose from Local colleges that provide training
28
Why would a business want to consider competition when deciding a location for their business?
Being near competitors - easy to find skilled workers, local suppliers, customers will know where to come
29
Why would a business want to consider the location of the market when deciding a location for their business?
Sometimes transporting finished products cost more than actual raw materials - it’ll be cheapest to locate near their customers Some business locate near their market so people know about business, can easily get to them, passing trade
30
Why would a business want to consider using the internet when deciding a location for their business?
Internet - more flexible Trading on internet means manufacturers can locate further from market but close to raw materials No fixed premises Work from home Employ people from all over the world
31
What is passing trade?
people who go into a shop, restaurant, etc. because they see it when walking past, not because they planned to go there
32
What essentially is marketing?
Coming up with a product that people want/need then making it as easy as possible for them to buy it
33
What are ‘the four Ps’ in marketing?
Product Price Promotion Place
34
What is the name reffered to the four P’s?
The marketing mix
35
Why is product an element of the marketing mix?
Firm musr identify customers needs/wants Then come up with a product that fulfils some/one of these needs
36
Why is price an element of the marketing mix?
Customers must think the price set is good value for money for the certain product
37
Why is promotion an element of the marketing mix?
Product must be promoted so the potential customers are aware it exists and want to buy it
38
Why is place an element of the marketing mix?
Whether it is sold through retailers or straight to the customer
39
What is a retailer
purchases goods in large quantities from manufacturers, directly or through a wholesaler, and then sells in smaller quantities to consumers for a profit
40
Different parts of the marketing mix affect each other. How can the quality of the product affect other elements of the marketing mix?
How much it costs to make Price it will be sold for
41
Different parts of the marketing mix affect each other. How can the changes in technology affect other elements of the marketing mix?
Improvement in e commerce would mean more companies sell online rather than in stores
42
Different parts of the marketing mix affect each other. How can customers needs progress over a period of time?
Needs will change overtime Products that use older technology will no longer meet the needs of customers
43
Different parts of the marketing mix affect each other. How can the competitiveness of the market affect other elements of the marketing mix?
If competitors are offering the same products at a lower price, a business might need to lower its own prices If a competitor develops a new product, a business might develop its own version of the same product - similar range to customers More promotion
44
Small businesses are just starting out so they need to make sure they get the marketing mix right. How may small businesses focus on price in the mix?
Will not be able to buy raw materials in large enough quantities and may not have the right equipment Start up costs - new machinery Higher prices than large businesses: need to cover their costs
45
Small businesses are just starting out so they need to make sure they get the marketing mix right. How may small businesses focus on product in the mix?
Small business’s wont have much money to spend on developing lots of different products - Smaller range of products May instead focus on providing higher quality products - job production
46
Small businesses are just starting out so they need to make sure they get the marketing mix right. How may small businesses focus on promotion in the mix?
Likely to use cheaper forms of advertising - flyers, free samples Promoting overall image - establishing image with customers Small businesses will effectively advertise locally rather than nationally
47
Small businesses are just starting out so they need to make sure they get the marketing mix right. How may small businesses focus on place in the mix?
Small businesses likely will produce products in small quantities from small retailers Lare retailers wouldn’t want to sell products from an unrecognised brand in case no one wants to buy the products May choose to sell directly to customers or through small retailers
48
What is a business plan?
An outline of what a business will do and how it aims to do it. Reduces risks of new business idea Calculates how much money, resources, organisation is needed
49
How can a business plan persuade a banker for a loan?
Can be used to convince by showing how the business will operate which should help banker decide how likely it is that they will get their money back
50
Can a business plan help an entrepreneur decide if the business is a bad idea?
If the business is a bad idea, the planning should help owners/bankers to realise this at an early stage to avoid wasting time/money on an idea that was never going to work
51
There are different elements to a business plan. Explain the use of considering the business idea
Should explain what the firm is all about Details of the product the firm will be selling How it will achieve its USP
52
There are different elements to a business plan. Explain the use of considering the target market
Explains who the business is aiming to sell to Should be backed up by market research
53
There are different elements to a business plan. Explain the use of considering the marketing mix
Describe how the business will sell its products using the 4P’s
54
There are different elements to a business plan. Explain the use of considering location
Describe where the business will locate and why
55
There are different elements to a business plan. Explain the use of considering finance
How much money needed for start up - where money will come from Cash flow forecast of business’s costs, revenue, profit There should also be ratios to show the banker the likely return of their investment

Business GCSE (11 decks)

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