Business Flashcards
(25 cards)
Profit
The primary goal for most businesses is to make a profit by ensuring that revenue exceeds costs.
Key roles of a business
profit, employment , choice, innovation and entrepreneurship, wealth creation , quality of life
employment
Businesses provide jobs, which in turn give people the means to earn incomes.
Choice
Businesses provide consumers with options for products and services.
Innovation and Entrepreneurship
Businesses drive innovation by developing new products or improving processes. Entrepreneurs take risks to start new ventures.
Wealth Creation
Businesses generate wealth for owners, employees, governments (through taxes), and society.
Quality of Life
Businesses can enhance the overall standard of living by providing valuable products and services and fostering economic growth.
Factors Influencing Choice of Legal Structure
size, ownership preferences, Finance
business are classified by
Size, Geographical Spread, industry, legal structure
name 5 external influences
economic, legal , social , political , competition
Name 5 internal influences
products, location , resources, management
what is an internal stake holder?
Employees, managers, and owners.
what is an external stake holder
Customers, suppliers, government, and the community.
stages of a business life cycle
establishment, growth , maturity , post maturity
what is establishment phase
Initial setup of the business, focusing on gaining market presence.
what is growth phase
Expansion of market share, customer base, and product offerings.
what is maturity phase
Slower growth, business stabilizes but may face competition.
what is post maturity phase
Could involve further growth, steady state, or decline.
recognize and name the challenges at each stage
In the establishment stage, businesses need capital and marketing to attract customers.
In growth, they may need to manage cash flow and scale up operations.
Maturity brings pressure to innovate and maintain market share.
Post-maturity can involve managing declining sales or repositioning the business.
what involves a business decline
Factors include poor management, failure to innovate, or economic downturns.
Stakeholder Issues in Liquidation
When companies go into liquidation
who is affected
Employees may lose their jobs and entitlements.
Creditors may not recover what they are owed.
Owners/shareholders may lose their investments.
Customers may lose access to products or services.
small businesses?
Small businesses: Sole traders or partnerships, often local or niche.
large businesses?
Public companies with global operations.
industries?
Industries: Primary (e.g., mining), secondary (e.g., manufacturing), tertiary (e.g., retail), quaternary (e.g., IT services), quinary (e.g., childcare).
