Creating A Business - Part 2

Question 1

What are social enterprises?

Answer 1

Businesses that trade to address social problems and improve communities or the environment. They make their money selling goods and services, but they reinvest their profits back into the business or local community.

Question 2

3 aims of social enterprises?

Answer 2

Economic , social and environmental

Question 3

Explain economic aims of social enterprises

Answer 3

Creates employment, for those who committed crime, minority groups

Gets people off benefits

Gives people a decent wage , improves living standards

Question 4

Explain social enterprise - social aim?

Answer 4

Ploughs profits back into community
Employs local people
Tries to ensure local Main Street benefits - sets up in a local area

Question 5

Explain social enterprise environmental aim?

Answer 5

Try’s to promote sourcing sustainable ingredients and raw resources

Encourage reducing waste - food/plastic

Run day-to-day business in an efficient manner - lighting/heating etc

Question 6

Factors that effect business location (MAIN 3)

Answer 6

Proximity/closeness to the market

Like to locate near primary market, large footfall, customers have easy access , reduce transport costs, product moved easily and seen by other people as they shop

Availability and price of land

Higher prices at central sites and vice versa. Competition can increase prices or even availability as well. Varies from area to area e.g newry,Dublin,London. Central sites may also not have any availability e.g Main Street full of shops

Parking

Customers/ employees require places to park their cars. City centre cars are small and expensive and vice versa

Question 7

Why do businesses have aims and objectives?

Answer 7

Businesses are set up and exist for a purpose. A major aim of each business is to make a profit. They will set objectives and summarise their mission statement. Differ depending on size and type.

Question 8

Common business aims.?

Answer 8

Survival
Profit maximisation
Growth
Corporate image
Concern for environment
Social responsibility

Question 9

Explain business aim - survival

Answer 9

All business want to survive. More prevalent when just starting up and at times of recession/economic crisis.

Question 10

Explain business aim - profit maximisation ensures

Answer 10

When turnover is greater than the cost of running the business. Profit ensures:

• owners and shareholders get a return on their investment
• staff have job security
• customers have a better standard of service

Question 11

Explain business aim - growth

Answer 11

Increase profits, eliminate competition, selling now products , entering new markets and opening new markets: Growth ensures

• larger share of the market
• increased sales - profit
• greater job security

Question 12

Explain business aim - corporate image

Answer 12

How a business is perceived by its stakeholders. Achieved by:

• high quality products
• contribute to local community
• treating staff/customers with respect

Question 13

Explain business aim - concern for environment

Answer 13

To reduce CO2 emissions and pollution, businesses can adapt strategies such as:

-reducing waste
-using biodegradable materials
-reuse/recycle materials

Question 14

Explain business aim - social responsibility

Answer 14

Many businesses aim to be socially responsible and include the communities of which they are apart of.

• employ local people
• taking part in local events
• sponsor activities
• allow charités to organise events on premises

Question 15

Why are aims and objectives helpful to business?

Answer 15

Define the nature and purpose of the business
Enable to plan for the future
Can measure performance over time

Question 16

Examples of business aims producing conflict

Answer 16

MAXIMISATION OF PROFITS VS GROWTH
Investing in new machinery/ opening new stores can be expensive

MAXIMISATION OF PROFITS VS SOCIAL RESPONSIBILITY
Make donations/ sponsor events can be expensive

PROVIDE A SERVICE VS SURVIVAL
Hospital wants to provide a service (caring for people’s health) but may be to costly and have to close A & E to survive.

Question 17

What are the ethical issues associated with business aims

Answer 17

Environmental issues
Employee working conditions
Equality
Social responsibility

Question 18

Explain ethical issue associated with business aim - Environmental Issues

Answer 18

Businesses activities should be undertaken in ways which protect the environment and minimise pollution. Ensure they care for the environment by planting trees. Providing litter bins, use recycled paper, sell biodegradable materials and not using plastic bags.

Question 19

Explain ethical issue associated with business aim - employee working conditions

Answer 19

Most valuable resource. Must provide safe working conditions and ensure health and safety of staff. Fair wage, break room, clean toilets and heating work spaces.

Question 20

Explain ethical issue associated with business aim - Equality

Answer 20

Employers must treat all stakeholders equally and not discriminate against people on grounds of age, gender, religion, race, sexuality, nationality or disability.

Question 21

Explain ethical issue associated with business aim - social responsibility

Answer 21

Cooperate with the local community, volunteer at local schools, purchase equipment for schools, support charity events and sponsor local events. Refuse to trade goods made from countries that exploit workers.

Question 22

What are stakeholders?

Answer 22

People or organisations who have an interest in the operations of a business. The decisions and actions of the business have an impact on all stakeholders.

Question 23

Examples of stakeholders

Answer 23

Owner Directors Shareholders Managers Producers/suppliers Consumers/ customers Lender Employees Pressure groups Local community

Question 24

Examples of stakeholders aims differing

Answer 24

SHAREHOLDERS may wish to withdraw dividends, whereas the DIRECTORS may prefer to retain some of the profits to build up reserves for the future

CONSUMERS require that the business offers them quality products at fair prices, whereas MANAGERS may charge high prices to increase sales revenues.

PRODUCERS aim to sell their products profitability to businesses, whereas a MANAGER seeks to acquire supplies at the lowest possible cost.

Question 25

Explain stakeholders interest in the business- Owner

Answer 25

Owner - profit, good brand image

Question 26

Explain stakeholders interest in the business - director

Answer 26

Directors - dividends, salary, bonus, growth

Question 27

Explain stakeholders interest in the business - manager

Answer 27

Managers- job security, good salary

Question 28

Explain stakeholders interest in the business - customer

Answer 28

Consumers/ customers- fair prices, high quality products/services, wide variety of goods, good customer service, good after-sales service

Question 29

Explain stakeholders interest in the business - supplier

Answer 29

Producers/suppliers- regular orders, payments on time , efficient ordering system

Question 30

Explain stakeholders interest in the business - lender

Answer 30

Lender- loan repayments on time , growth

Question 31

Explain stakeholders interest in the business - pressure groups

Answer 31

Pressure groups- fair wages, job safety, environmental

Question 32

Explain stakeholders interest in the business - shareholders

Answer 32

Shareholders- dividends, growth, expansion

Question 33

Explain stakeholders interest in the business - employees

Answer 33

Employees- job security, good wages/promotion opportunities, good working conditions

Question 34

Explain stakeholders interest in the business - local community

Answer 34

Local community - providing jobs, no pollution, improving services in local community