Business 1.4: Making the Business Effective Flashcards
(15 cards)
What does limited liability mean?
The business and owner are separate entities and are responsible for the debts of a company only to the extent of the nominal value of their shares
What does unlimited liability mean?
The business owner and the. business are seen as having the same identity and are personally responsible for all debts and obligations of the business
What is a sole trader?
A sole trader is someone who runs and owns the business as an individual
What is a partnership?
A partnership is an arrangement between two or more people to operate a business together
What is a franchise?
A franchise is a business that gives the right to another person or business to sell goods
What are the advantages of a sole trader?
You have complete control over the business, 100% of the profits and is easy to setup
What are the disadvantages of a sole trader?
Unlimited liability and only one perspective on everything
What are the advantages of partnership?
Shared responsibilities and more strengths/less weaknesses
What are the disadvantages of partnerships?
Conflicting ideas and unlimited liability
What are the advantages of a private limited company (Ltd)?
Limited liability and more credibility
What are the disadvantages of a private limited company (Ltd)?
Higher costs and limited access to capital
What are the advantages of a franchise?
Reduced risk and brand recognition
What are the disadvantages of a franchise?
High initial costs and limited control
What are the four main factors that influence business location?
Proximity to: market, labour, materials and competitors
What are the four elements of the marketing mix
Price, product, place and promotion
