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Business > Business Activity – 1 > Flashcards

Business Activity – 1 Flashcards

1
Q

What are the characteristics of an entrepreneur

A

Confidence
Risk-taking
Determination
Creativity

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2
Q

What are the financial risks And rewards of being an entrepreneur

A

Risks: if it doesn’t succeed the more business will lose its money

Reward: potential to make a lot of money

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3
Q

What are the non-financial risk and rewards of an entrepreneur

A

Non-financial: health

Rewards:
– Independence
– self satisfaction
– make a difference

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4
Q

Advantages of a sole trader

A

Easy to set up, usually little capital needed to set up, full control, financial information is private

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5
Q

DisAdvantages of a sole trader

A

Unlimited liability, Hours of work, Skills shortage, continuity, illness may lead to stop in business service

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6
Q

Advantages of a partnership

A

More ideas, continue to Carry on if one dies all goes on holiday, financial information is private, more ideas, more owners capital, workload is shared, wider range of skills

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7
Q

Disadvantage of a partnership

A

Capital maybe low, profit shared, unlimited liability

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8
Q

Advantages of a public limited company

A

Limited liability for shareholders, easy to Borrow money (Low risk), can raise large amounts of capital (By selling shares to The public)

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9
Q

Disadvantages over a public limited company

A

Complex management, possibility of takeover if someone buys a high percentage of the business, financial information is open to the public, complex to set up (must have at least £50,000)

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10
Q

Advantages of a private limited company

A

Continue to carry on, can raise money easily (Banks are more likely to lend to them), limited liability, control over share sales

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11
Q

Disadvantages of a private limited company

A

Can’t shares to the public, Less profit, hard to set up, financial information is available to the public

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12
Q

What is unlimited liability

A

The owners of the business are responsible for paying all the debts

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13
Q

What is a limited liability

A

The owners of the business can only lose money that they invested into the business if it fails

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14
Q

What are business objectives

A

The aims of the business which can include survival, profit, growth and providing a service

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15
Q

What are the internal stakeholders of the business

A

Owners and employees

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16
Q

What are the external stakeholders in the business

A

Customers, suppliers, government, local community

17
Q

How can the business activity affect the owners

A

They can either own profits or lose money

18
Q

Can Can business activity affect the employees

A

They are able to make an income from the business however if the business fails they may be made redundant or lead to unfair employment conditions

19
Q

Affect of business activity on customers

A

The customers want to obtain products and services are good prices however they may be sold poor quality goods, overcharged for goods, experience poor customer service

20
Q

Business activity on the suppliers

A

They sell their goods to another business and earn profit for doing this however they may lose money if the business does not pay for the goods and cash flow problems in the business may mean that they delay payment to the suppliers

21
Q

Affect of business activity on the government

A

They receive tax revenues from the owners workers suppliers and customers

22
Q

Affect of business activity in the local community

A

People can earn money from jobs however the community can Be affected by pollution or road congestion is caused by the business

23
Q

What are methods of organic growth

A

Increasing output
Gaining new customers
Developing new products
Increasing market share

24
Q

How can businesses gain new customers

A

Reducing prices, opening new stores, better marketing

25
Q

What is backwards vertical growth

A

When a business merges, or takes over another business that supplies it with goods or services

26
Q

What is horizontal growth

A

To businesses involved in similar operations

27
Q

What is forward vertical growth

A

When a business takes over the business that it supplies goods or services to

28
Q

What is vertical growth

A

Merging are taking over Cobleas a different stage of production

29
Q

What is Diversification

A

When a business merges or takes over a business in which they have no connection to

Business (4 decks)

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