Chapter Two - Small Business

Question 1

Demand

Answer 1

In business terms, demand is the quantity of a product that consumers are prepared to purchase.

Question 2

Market research

Answer 2

Market research is a process of systematically collecting, recording and analysing information concerning a specific market.

Question 3

Market conditions

Answer 3

Market conditions are the feature of a market into which a new product or service is to be introduced, and include factors such as the number of potential customers, level of competition and potential for growth.

Question 4

Innovation

Answer 4

Innovation is either creating a new product, service or process, significantly improving an existing one.

Question 5

Research and development

Answer 5

Research and development is a set of activities undertaken to improve existing products, create new products and improve production.

Question 6

Entrepreneurship

Answer 6

Entrepreneurship is the ability and willingness to start, operate and assume the risk of a business venture in the hope of making a profit.

Question 7

Business entity

Answer 7

A business entity is any organisation engaged in the production of goods and services.

Question 8

Incorporated

Answer 8

A business that is incorporated has a separate legal entity from the owners.

Question 9

Sole trader

Answer 9

A sole trader business is a business owned and operated by one person.

Question 10

Unlimited liability

Answer 10

Unlimited liability means the business owner is personally responsible for all the debts of his or her business.

Question 11

Partnership

Answer 11

A partnership is an unincorporated legal business structure with a minimum of two and a maximum of 20 owners.

Question 12

Silent or sleeping partner

Answer 12

A silent or sleeping partner contributes financially to the business but takes no part in the running of the partnership.

Question 13

Incorporation

Answer 13

Incorporation is the process that businesses go through to become a registered company and a separate legal entity.

Question 14

Shareholders

Answer 14

Shareholders are the owners of a company.

Question 15

Limited liability

Answer 15

Limited liability means that the shareholders in a company cannot held personally responsible for the debts of that business

Question 16

Proprietary (private) company

Answer 16

A proprietary (private) company is an incorporated business with a minimum of two, and a maximum of 50 private shareholders.

Question 17

Cooperative

Answer 17

A cooperative is a democratic organisation owned and controlled by the people it serves, who join together for a common benefit.

Question 18

Trust

Answer 18

A trust is a business structure where a trustee (usually a company) holds property or carries out business on behalf of the members of the trust, known as beneficiaries.

Question 19

Goodwill

Answer 19

Goodwill is the monetary value attached to the reputation of a particular business.

Question 20

Franchise

Answer 20

A franchise means buying the rights from another business to distribute its products under it names.

Question 21

Franchisor

Answer 21

A franchisor is an individual or organisation that grants a franchise.

Question 22

Franchisee

Answer 22

A franchisee is an individual or organisation that purchases a franchise.

Question 23

Zoning

Answer 23

Zoning is a means by which local councils allocate land for different uses, such as residential, commercial, recreational and industrial.

Question 24

Complementary businesses

Answer 24

Complementary businesses offer products or services that are related to a different business and that may be of use to the customers of that business.