business in the real world

Question 1

what is an entrepreneur

Answer 1

an individual who starts their own business based on an idea they have.

Question 2

what are the characteristics of an entrepreneur?

Answer 2

creativity, risk taking, determination and confidence

Question 3

what is ownership?

Answer 3

the legal control over a business

Question 4

what is a sole trader?

Answer 4

a business that is owned and run by one person

Question 5

what is unlimited liability?

Answer 5

business owner who is responsible for all the debt

Question 6

what is limited liabilty?

Answer 6

not liable for the debts in a business

Question 7

advantages of sole trader

Answer 7

quick and easy to set up
total control over the business
your own boss

Question 8

disadvantages of a sole trader

Answer 8

risk of unlimited liability
involve long hours, stressful conditions
high level of responsibility

Question 9

what is a partnership

Answer 9

type of business that has between 2 and 20 owners.

Question 10

what is a deed of partnership

Answer 10

a document that is signed by all owners of the business agreeing to their obligations.

Question 11

advantages of partnership

Answer 11

quick and easy to set up
shared decision making
shared responsibility for debt
partners have more skills and ideas

Question 12

disadvantages of partnership

Answer 12

can involve long hours
profits have to be shared between partners
conflict between owners
risk of unlimited liability

Question 13

what is a private limited company (ltd)

Answer 13

can be a small or large business that has limited liability
The owners of a private limited company are known as shareholders

Question 14

what are shareholders

Answer 14

A part owner of a private or public limited company.A share is a portion or percentage of a company.

Question 15

advantages of a LTD

Answer 15

the owners have limited liability
it gives individuals the opportunity to be their own boss
any new shareholders need to be invited, which protects the business from outside influence
shares in the business can be sold to raise money

Question 16

disadvantages of an LTD

Answer 16

there is often more paperwork
in some instances, other people are able to view the business’ financial information
it can be very time consuming to set up

the business may require outside professional help to manage its finances

Question 17

what is a public limited company (plc)

Answer 17

a business that is legally allowed to sell its shares to the public
shareholders become part owners of the business and have a voice in how it operates.

Question 18

advantages of being PLC

Answer 18

the business has the ability to raise additional finance through
share capital
the shareholders have
limited liability

Question 19

disadvantages of PLC

Answer 19

it is expensive to set up, requiring a minimum set up cost of £50,000

there are more complex accounting and reporting requirements

there is a greater risk of a
hostile takeover by a rival company as the company cannot control who buys its shares

Question 20

what is a not-for-profit organisation

Answer 20

A not-for-profit organisation is a business that aims to do something other than to make profit for the owners, such as providing a public service or helping people
eg a charity

Question 21

what are business aims and objectives

Answer 21

These give a business direction and provide a purpose for what the business does each day.

Question 22

aim

Answer 22

business aim is the overall long-term target or goal of the business,

Question 23

objective

Answer 23

objectives are the short-term steps a business needs to take to meet its overall aims.

Question 24

financial aims and objectives

Answer 24

survival
profit maximisation
growth

Question 25

non financial aims and objectives

Answer 25

social and ethical objectives
customer satisfaction

Question 26

what is the purpose of setting objectives?

Question 27

what is a stakeholder

Answer 27

A stakeholder is any person, group of people or other organisation that has an interest in the activities of a business.

Question 28

internal stakeholder

Answer 28

work within a business, either making decisions or carrying them out

Question 29

external stakeholders

Answer 29

do not work within a business but are affected by its activities.

Question 30

what is a pressure group

Answer 30

groups of people who share a common interest in the business .

Question 31

managers

Answer 31

Staff who are responsible for implementing the decisions made by the owners and overseeing the work that is required.

Question 32

suppliers

Answer 32

Other businesses and organisations that provide products or services to the business