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Introduction To Business Flashcards

1
Q

Sole trader

A

Anyone who runs their own business

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2
Q

Unlimited liability

A

You are personally responsible for all the depts of the business

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3
Q

Partnership

A

Two or more people who run a business

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4
Q

3 advantages to partnership

A

Different skills
More time
Less hours

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5
Q

3 disadvantages to partnership

A

Let you down
Avoid jobs
Limited finances

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6
Q

Deed of partnership

A

Set of rules for running a partnership

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7
Q

Sleeping partnership

A

Someone who invests money but takes no part in the day to day running of the business

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8
Q

Company

A

Separate legal existence

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9
Q

Ltd

A

Private limited company

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10
Q

3 advantages to ltd

A

Limited liability
Shareholders invest
Shareholders become directors

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11
Q

3 disadvantages to ltd

A

Complicated to set up

Loss of individual control accounts must be made public

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12
Q

Plc

A

Public limited company

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13
Q

2advantages to plc

A

Raises lots of capital investment

Generates a lot of publicity

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14
Q

2 disadvantages to plc

A

Bad publicity can lead to drop in share price
Shareholders can revolt against ideas
High starting costs

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15
Q

Social enterprise

A

A business who seeks to help people and give back

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16
Q

Franchising

A

Paying a fee (royalty fee) to trade under another business

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17
Q

10 steps to franchising

A
  1. Apply
  2. Security check
  3. Interview
  4. Experience- shadow
  5. Meet franchise fam
  6. 2nd interview
  7. Panel interview
  8. 9 months training
  9. deal
  10. Hand over keys
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18
Q

2 advantages to franchising

A

Buy cheap stock

Offers you wouldn’t otherwise get e.g advertising

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19
Q

2 disadvantages of franchising

A

Long process

Expensive

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20
Q

Name the 3 sectors of the economy and what they do

A

Primary- raw material
Secondary- manufacturing
Tertiary-service

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21
Q

Examples of sectors of e economy

A

Diamond extraction-p
Diamond ring- s
Jewlers-t

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22
Q

Entrepreneurship

A

Owning your own business and haven’t excellent ideas

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23
Q

Why is a business plan important

A

Clear objectives–sales increase-profits–reinvest/-expand–increases sales–profits
See where your going wrong
Organised

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24
Q

What are the peters 5 forces

A
  1. Threat of new entrants
  2. Threat of subsidies
  3. Degree of rivalry
  4. Bargaining power of buyers
  5. bargaining power of suppliers
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25
Opportunity costs
The best alternative given up
26
Business ethics
Doing what is morally right
27
Sustainability
Meeting today's needs without taking away resources from the future
28
Bank of England
Responsible for making decisions in interest rates
29
Redundancy
When your job no longer exists
30
HSE
Health and safety executive-oversees all safety and law inspections
31
Negative externalities, example
A negative effect on a third party from a transaction Smoking Drunk behaviour
32
Break even
How many products I must sell before you cover all your costs
33
Why do you need to know your break even point?
Set targets Minister success Where your going wrong
34
Limitations to break even
Prediction | Can change
35
Break even formula
``` BE= fixed cost/contribution Contribution= selling price-variable cost ```
36
Margin of safety
How many products you are above break even
37
Investment
Spending money whichbyou later benefits you
38
Investment appraisal
How a business decides if an investment project is worthwhile
39
Advantages of knowing payback
Simple to calcite | An early return is important even liquidyis more important than quality
40
Disadvantages to knowing payback
Disregards cash flow | Discrimination against projects which involve a long payback period
41
Formula for annual accounting rate of return (ARR)
ARR= average accounting profit divided by initial investment x100
42
Budget
Allocating a set amount of money each month for various expenses
43
Variance
Where there is a difference between planned budget and the actual outcome of the budget
44
Advantages to knowing your budget
Simple to calculate | Allows decision making
45
Disadvantages to knowing your budget
Disregards other factors
46
Zero budgeting
Going to the boss and asking for more money
47
Cash flow
Document monitoring money coming in and out
48
Retained profit
Profits from previous year
49
Advantages/disadvantages to retained profits
Don't have to borrow--shareholders expect dividends
50
Personnel savings
Using own savings to support business
51
Advantages/disadvantages to personal savings
No interest charges--could lose all your money
52
Sale/lease. Ack
Sell the physical building and lease it back
53
Advantages/disadvantages to sale lease back
Raise money quickly--you may be evicted over time
54
Factoring
Sell the debt to a debt collecting money
55
Advantages/disadvantages to factoring
Doesn't waste time--reflects badly on business
56
Divestment
Close off/sell pet it the business
57
Advantages/disadvantages to divestment
Reduces runnin costs--closes the stream of revenue
58
Legend
Greggy Tizzle
59
Reduction and current assists
Selling off stock
60
Advantages/disadvantages reduction and current assets
Sell stock quickly--lose stock
61
Loan
When you borrow money from the bank and pay it back over a certain period
62
Issues shares
Business cretes new shares and sells them
63
Grants
Given money do not have to pay back. It spent on stated reason
64
Selling equity
Selling % of the business
65
Venture capital
Investing in the business then receiving a high % or profits and over a few years the business will buy you out
66
Trade credit
Paying for goods at a later stage
67
Overdraft
Withdrawing money used for a small amount of time so you pay it back within a set amount
68
Leasing
Paying someone for you to have the right to use it
69
Hire purchase
Pay every month once instalment has finalised you completely own it
70
Job production
Satisfying the customer Small business Flowers for a wedding
71
Batch production
Set procedure and stages | One process before the next
72
Flow production
Products move along the line | Car manufacturer
73
Cell production
Teamwork to ensure the product is put together
74
P.S contribution
Variable costs
75
P.S market skimming
High prices then dropping it
76
P.S premium
High prices
77
P.S loss leader
Low prices so good value
78
P.S phycological
In their head e.g food
79
P.S competitor
Getting the best prices e.g cafe
80
P.S predatory
Push out competitors
81
P.S cost plus
Add on cost for profit e.g clothes
82
P.S Penetration
Stealing customers
83
Product mix
The overall range if products a business produces and sells
84
Product life Cycle
The life of a product from its introduction through to its potential decline
85
Promotion
Making customers aware of the brand
86
Above the line
Where you don't contact the customer
87
Below the line
Where you come into direct contact with the customer
88
Why choose the radio to promote stuff?
Most people drive Played a lot Customers trust the radio--same time everyday
89
Wholesaler
Person or company that sells goods in large quantities at low prices e.g drink waters
90
What can you get diseconomies of scale
Poor communication Conflict Buying too much stock
91
Name he 4 stages of a product life cycle
Intro,growth, maturity, decline

Business (5 decks)

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