Jacobs

Question 1

What is a product ?

Answer 1

Anything that is capable of satisfying a customers needs and it is tangible

Question 2

What is a service ?

Answer 2

An act that a business person carries out in exchange for money and they are intangible

Question 3

What is an enterprise ?

Answer 3

Another name for a business often used to describe a start up
- a person who shows initiative by taking a risk and setting up a business

Question 4

What is an entrepreneur ?

Answer 4

A person who starts a business and takes on financial risk in hope of making profit

Question 5

What is an SME ?

Answer 5

A small medium enterprise

Question 6

What is an SME defined by ?

Answer 6

-number of employees
-turnover
-net worth on a balance sheet

Question 7

What percentage of the UKs businesses are defined as small ?

Answer 7

99.2%

Question 8

What do SMEs contribute to the economy ?

Answer 8

-help communities develop
-create new businesses
-add to national income
-create social change

Question 9

What is the primary sector ?

Answer 9

Extracting raw materials
Eg. Coal mining

Question 10

What is the secondary sector ?

Answer 10

Manufacturing and turning raw materials into finished goods

Question 11

What is the tertiary sector ?

Answer 11

Services= selling goods and services

Question 12

What is a stakeholder ?

Answer 12

Anyone with an interest in the business

Question 13

What are examples of stakeholders ?

Answer 13

-customers
-shareholders
-community
-employees
-government
-suppliers
-financial institutions

Question 14

How can stakeholders be organised ?

Answer 14

-internal / external
-primary / secondary

Question 15

What is a primary stakeholder ?

Answer 15

They have a direct relationship with the business

Question 16

What is a secondary stakeholder ?

Answer 16

Not directly related to the business

Question 17

Why does stakeholder conflict occur ?

Answer 17

Because it is impossible to meet the needs of all stakeholders

Question 18

What does stakeholder mapping map ?

Answer 18

Map the relative power of each stakeholder group against the degree of interest of that stakeholder

Question 19

What is the purpose of a business plan ?

Answer 19

-secure external funding
-ensure that the firm develops a healthy financial structure
-identify problem areas the business may face
-to set targets
-check firms development
-provide realistic expectations

Question 20

What are the components of a business plan ?

Answer 20

-skills of the entrepreneur
-operations
-financial forecasts
-the market
-the businesses products and services
-the marketing strategy

Question 21

Hat factors should you consider when choosing business location ?

Answer 21

-proximity to market
-cost
-infrastructure
-labour supply
-access to materials

Question 22

What is a diseconomy of scale ?

Answer 22

They occur when a business grows so large that the cost per unit increases

Question 23

What is a sole trader ?

Answer 23

-A business with one owner
-must pay taxes on their profits
-unlimited liabilities

Question 24

What are the advantages of a sole trader ?

Answer 24

-easy to set up
-quick decision making
-profits kept by owner

Question 25

What are the disadvantages of a sole trader ?

Answer 25

-unlimited liability -no one to share ideas with -isolates

Question 26

What is a partnership ?

Answer 26

-Joint owners of a business -Unlimited liability

Question 27

What are the advantages of a partnership ?

Answer 27

-easy to set up -profit to partners -partners contribute skills

Question 28

What are disadvantages of partnerships ?

Answer 28

-unlimited liability -reliability can be an issue=conflict -sharing profits

Question 29

What is a private limited company (ltd) ?

Answer 29

-limited liability -owners control who buys shares -public cannot buy shares -minimum 2 people no maximum

Question 30

What are advantages of an ltd ?

Answer 30

-protection of limited liability for investors -easy to raise capital -banks more willing to lend money -easy to expand

Question 31

What are disadvantages of an ltd ?

Answer 31

-has to issue more info about the business= expensive -prepare annual accounts -make annual accounts available for public and competitors to see

Question 32

What is a public limited company (plc) ?

Answer 32

-limited liability -shared can be bought + sold by anyone -normally very large business -company has its own legal status

Question 33

What are advantages of a plc ?

Answer 33

-protection of limited liability for owners and investors -easy to raise capital -banks more willing to lend money -easy to expand

Question 35

What are the disadvantages of a plc ?

Answer 35

-expensive to produce accounts each year -competitors and public can see financial info -expensive process to become a plc

Question 36

What is a government owned business ?

Answer 36

-Public sector -provided by everyone -eg. NHS

Question 37

What is breakeven ?

Answer 37

The point in Wich all costs are covered however no profit is made- the business makes neither a profit or a loss

Question 38

What is the breakeven formula ?

Answer 38

Fixed costs ————— (Selling price - variable cost per unit)

Question 39

How can you tell the breakeven point on a graph ?

Answer 39

Where the lines intersect

Question 40

What is revenue ?

Answer 40

The money coming in from sales of goods

Question 41

What is the revenue formula ?

Answer 41

Revenue = selling price x quantity sold

Question 42

When is salary payed ?

Answer 42

Per year

Question 43

When are wages payed ?

Answer 43

Per hour

Question 44

What are costs ?

Answer 44

Outgoing payments a business must make

Question 45

What are costs split into ?

Answer 45

-fixed costs -variable costs

Question 46

What are fixed costs ?

Answer 46

Stay the same regardless of output Eg. Rent

Question 47

What are variable costs ?

Answer 47

Change in relation to the number of items produced Eg. Raw material

Question 48

What is the formula for total costs ?

Answer 48

Total costs = fixed costs + variable costs

Question 49

What are semi variable costs ?

Answer 49

Partially fixed and partially variable

Question 50

What are direct costs ?

Answer 50

Those that are easily attributable to a unit of output

Question 51

What are indirect / overhead costs ?

Answer 51

All other costs are inquired but cannot be easily directly attributed to an individual

Question 52

What is the profit formula ?

Answer 52

Profit = total revenue - total costs

Question 53

What is a budget ?

Answer 53

An estimate or forecasted financial plan for income and expenditure over a period of time

Question 54

What is the purpose of a budget ?

Answer 54

-establish priorities -make sure businesses don’t overspend -encourage responsibility of spending -assign responsibility -improve spending efficiency