Nat 5 Business Flashcards
(154 cards)
1
Q
What is a need?
A
A need is something necessary for survival.
2
Q
Give an example of a need.
A
Food, clothing, water, magic the gathering.
3
Q
What is a want?
A
A want is something that you think you need but isn’t necessary for survival.
4
Q
Give an example of a want.
A
Video games, Warhammer etc
5
Q
What is a good?
A
A good is something that is a product that you can buy and have.
6
Q
Give an example of a good.
A
Cars, food, house, furniture, books, table.
7
Q
What is a service?
A
A service is something that someone provides you with then and there.
8
Q
Give an example of a service.
A
Hairdressing, transport, education, entertainment.
9
Q
What is a tangible product?
A
A tangible product is a product that can be seen and touched.
10
Q
Give an example of a tangible product.
A
Food, Car, house, sofa, any good.
11
Q
What is an intangible product?
A
A tangible product is a product that cannot be seen or touched.
12
Q
Give an example of an intangible product.
A
Insurance, banking, car servicing, any service.
13
Q
What is a durable product?
A
A product that lasts for a long time (over a year).
14
Q
Give an example of a durable product.
A
Car, house, sofa, a membership.
15
Q
What is a non-durable product?
A
A product that last for a short amount of time (less than a year)
16
Q
Give an example of a non-durable product.
A
Food, a ticket to a theatre, a device.
17
Q
What is the anagram for the factors of production?
A
CELL
18
Q
What does CELL stand for?
A
Capitol, enterprise, land, labour.
19
Q
What is Land in the factors of production?
A
The raw material / natural resource.
20
Q
What is Labour in the factors of production?
A
The workforce / employees.
21
Q
What is Capitol in the factors of production?
A
The man-made tools / equipment and money.
22
Q
What is Enterprise in the factors of production?
A
The business idea.
23
Q
Example of Land from factors of production.
A
Plot of land, forest, water.
24
Q
Example of Labour from factors of production.
A
Chef, doctor, waiter, farmer.
25
Example of Capitol from factors of production.
Tractor, oven, machinery, buildings.
26
Example of Enterprise from factors of production.
Restaurant, clothes shop, cafe.
27
What are the sectors of industry.
Primary, Secondary, Tertiary.
28
What is the primary sector of industry.
Industries that are concerned with natural resources.
29
What is the secondary sector of industry.
Industries that are concerned with making products.
30
What is the Tertiary sector of industry.
Industries that are concerned with doing services.
31
Give an example of a primary sector of industry business.
Farming, mining, fishing, forestry.
32
Give an example of a secondary sector of industry business.
cereal companies.
33
Give an example of a tertiary sector of industry business.
banking, beauticians, tourism, hairdressers.
34
What is an entrepreneur?
Someone who has a business idea develops it with the factors of production to provide goods or services to make money and is prepared to take any risks to complete it.
35
Name an entrepreneur and what they do.
Look at google to see if your answer is correct.
36
Skills of an entrepreneur.
Being able to take risks, having good communication skills, being able to rise to the challenge, having good decision making and having good leadership skills.
37
What is spotting a gap in the market.
It is coming up with an idea of a product or service that is not being offered by any other company in the area and is not already available in the marketplace.
38
What are sources of help and advice?
The bank, an enterprise agency, a lawyer, chambers of commerce, other entrepreneurs, the world wide web, the princes trust, training centre, suppliers, other businesses and an accountant.
39
What is the criteria needed to apply for the princes trust?
Aged 16 - 30, studying less than 14 hours a week or not compulsory education, unemployed or working less than 16 hours a week.
40
What is the 4 step cycle of business?
Businesses produce goods and services to meet customers needs and wants.
Customers buy goods and services to satisfy their needs and wants.
Wealth is made for the business, employees and owners.
Customers have money to spend from the wages to buy other goods and services.
41
What is the 5 step cycle of business?
Entrepreneurs set up businesses to sell goods that people need and want.
Consumers use income and buy goods and services in order to satisfy their needs and wants.
The businesses making the goods and services earn money to pay employees wages and the owners also make money.
Consumers now have more money to spend from wages and want more goods and services.
Businesses now require to expand to produce more goods and services for consumers - the process goes on.
42
Things that can be in a business plan.
Business name, type of ownership, what the business does, description of goods, key people and skills, were is the business and what equipment is needed, who are the customers, the prices, the competitors, market research results, who are the investors, estimated budget, profit and loss and cost and the expected revenue.
43
What are the sources of finance?
Debt factoring, hire purchase, mortgage, grant, trade credit, retained profits, additional capital, leasing, bank overdraft, short term bank loan, long term bank loan.
44
What is a bank overdraft?
A customer can overdraw from their bank account, ie, spend more than they have in their bank account up to an agreed limit.
45
What are the advantages and disadvantages of bank overdrafts.
adv: They could, for example, pay wages from their bank account even though they have no money in their account.
dis: This can work out as expensive if used for a long time as interest is charged daily.
46
What is trade credit?
Businesses can buy goods from suppliers and then arrange to pay for them at a later date usually within 30 to 90 days.
47
What are the advantages and disadvantages of trade credit.
adv: This gives the firm time to sell the products at a higher price, earn a profit and then pay their suppliers – hopefully before the bill or invoice arrives.
dis: Also suppliers may be reluctant to sell more goods on credit if the business struggles to pay on time.
48
What is factoring?
When customers who buy on credit fail to pay on time or attempt not to pay at all the business can use a factoring service. The factor will buy the debts of the business and they will then attempt to recover payment from the customers.
49
Advantages and disadvantages of factoring.
adv: This saves the business time pursuing customers and ensures the business receives most of the money it is owed.
dis: The factor charges the business a fee for their service and so this reduces the amount of cash they will actually receive.
50
What is short term bank loan?
The bank may provide a loan to the business for a fixed amount to be paid back over a fixed period of time in fixed monthly instalments.
51
Advantages and disadvantages of short term bank loans.
adv: The loan may be used to buy an essential piece of equipment or to obtain extra cash to pay bills.
dis: When the business tends to be small, or newly formed, they tend to be more of a risk. As such these loans can be more difficult to obtain and the interest rate to be paid tends to be much higher.
52
What is Hire Purchase?
Higher purchase allows a business to buy an asset such as a delivery van and pay it back over 36 months. A deposit is required followed by payment over a few years.
53
Advantages and disadvantages of hire purchase.
adv: This allows the business to purchase items like machinery and equipment with only a small initial outlay of money.
dis: Interest is usually charged and so it can be an overall more expensive way of purchasing large items.
54
What is leasing?
When a business uses a leasing system it never owns the asset. The business simply ‘rents’ the asset. For example Arnold Clark now offers a leasing system to allow small businesses to rent motor vehicles and vans.
55
Advantages and disadvantages of leasing.
adv: The advantage is that the leasing system will replace the asset every couple of years and they are also responsible for any repairs.
dis: Rental charges or leasing costs can build up over a long period of time and so it may actually work out cheaper to actually purchase the asset in the first place.
56
What is additional capital?
This is where the amount of money invested in the business by the owner is increased by the owners (they take more of their own personal savings and ‘lend’ it to the business. Or they may decide to invite a partner to join the business.
57
Advantages and disadvantages of additional capital.
adv: The business does not need to pay back the money which has been invested and there is no interest to pay or any other costs involved.
dis: If a partner is now involved in running the business, profits now have to be shared and so each owner gets a smaller share of the profits.
58
What is mortgage?
A common method of financing land and premises such as shops is to take out a mortgage which is a type of long-term loan secured against the title deeds of a property or piece of land.
59
Advantages and disadvantages of mortgage.
adv: The business is given a long period of time (25 years) to pay the mortgage back.
dis: Interest has to be paid on top of the initial amount borrowed.
60
What is long term bank loan?
The bank may grant a loan for a fixed amount, to be paid back over a fixed period of time in fixed instalments. A long-term loan might be taken out to buy a very expensive piece of machinery and be re-paid over a 5 year period.
61
Advantages and disadvantages of long term bank loan.
adv: As such the business is able to purchase machinery now and use it in the business to start generating profit.
dis: Interest is usually charged on top of the initial loan amount and so this can be a very expensive way of purchasing equipment and machinery.
62
What is a grant?
A Source of finance from central government or local government, Business Gateway or the Princes Trust.
63
Advantages and disadvantages of a grant.
adv: In most cases the money does not have to be repaid.
dis: Usually the business is told what the money must be used for.
64
What are retained profits?
A business can use its profits to purchase machinery and equipment.
65
Advantages and disadvantages of retained profits.
adv: The advantage is that there is no interest to be paid and the business is not incurring any debts. The business will own the assets straight away.
dis: When a business spends all of its profits it can run into cash flow problems. They may not be able to pay for any unexpected costs or expenses as all profit has been spent.
66
What are the features of sole traders?
One person owns and runs the business.
67
What are the aims of sole traders?
Survival and growth.
Business accounts are kept private.
Main aim is to make a profit.
68
What are the advantages of sole traders?
The owner gets to make all the decisions.
Relatively easy to set up.
Owner keeps all the profits.
69
What are the disadvantages of sole traders?
Difficult for the owner to get time off.
Work may stop or business may close if the owner is ill.
The owner is responsible for all business debts (Unlimited Liability).
Difficult for the owner to get time off.
May be limited finance available.
If the owner dies the business may cease trading.
70
What are the features of partnerships?
Between 2 and 20 people own and run the business
Partners bring different skills and knowledge
Partners can specialise in different aspects of the business
71
What are the aims of partnerships?
Survival and growth
Partnerships aim to earn a profit
72
What are the advantages of partnerships?
Easier for partners to take time of
Workload can be shared between partners
May be easier to obtain loans from banks and other lenders
More capitol (money) available
73
What are the disadvantages of partnerships?
Profits have to be shared
Partners are responsible for the debts of the business (unlimited liability)
Disagreements and arguments between partners
74
What are the features of LTD's?
Company name ends with Ltd
Usually a family owned business
Private shareholders own the business
75
What are the aims of LTD's?
To maximise profits
Survival and growth
76
What are the advantages of LTD's?
Limited liability
Easier to raise finance from banks and other lenders
Control remains within the family
Shareholders appoint directors to run the company
77
What are the disadvantages of LTD's?
Cannot sell shares on stock market
Profits have to be shared
Final accounts must be prepared and made available to interest parties
78
What are the features of PLC's?
Members of the public can buy shares in the company on the Stock Exchange
Tend to be large
Owned by shareholders and run by board of directors
Name of the company ends with plc
79
What are the aims of PLC's?
Maximise profits
Growth and Survival
80
What are the advantages of PLC's?
Limited Liability
Easy to borrow huge amounts of money from banks and other lenders
Can become very powerful and dominant business
81
What are the disadvantages of PLC's?
Costly and complicated to set up
No control on who buys shares
Members of the public must be able to access all financial records
82
What does stock market mean?
Where people buy and sell shares in companies – this is now mainly done on-line
83
What does limited liability mean?
Investors in a business (company) can only lose the value of the shares they own – their private belongings cannot be taken to pay the company’s debts.
84
What does 'companies act' mean?
An act of law which sets out rules and procedures which companies must abide by.
85
What does shareholders mean?
A person who invests (uses his/her own money) to buy a share in a company. Shareholders jointly own the company.
86
What does board of directors mean?
A group of highly skilled and professional managers who are appointed by the shareholders (owners) to run the company on their behalf.
87
What does annual accounts mean?
Statements which are produced once per year and shows the value of the businesses assets and how much profit the business has made in the current year.
88
What does disposable income mean?
Money left after essential payments and your needs
89
What does a consumable item mean?
non-durable goods
90
What defines your business?
factors of production
91
What factor of production are consumables?
land
92
What three words describe the sectors of industry?
taking, making, selling
93
What is the main way to describe adding value?
Doing things other people can't do.
For secondary and tertiary it's also branding.
94
What is a franchise?
A franchise is a business agreement where one business can operate under the name of another business.
95
What is a Franchisor?
The one who owns original business
96
What is a Franchisee?
This is the one who has bought the right to use the original business name and enter into trade selling products.
97
What are the features of a franchise?
The franchisee pays an annual fee to the franchiser for use of the company name.
98
What are the aims of a franchise?
The entire franchise aims to survive
Profit maximisation for everyone
99
What are the advantages of a franchise?
The franchisor will provide advice, training and support to the franchisee
Less risky method for the franchisee to set up in business
The franchisee is joining a popular, established and highly successful business
The franchise system is a very quick and efficient way for the franchisor to achieve growth
The franchisor will provide advice, training and support to the franchisee.
The franchise allows the franchisor to increase market shares
100
What are the disadvantages of a franchise?
Can be very costly to join (purchase) a successful franchise
The franchisee has to use the franchise logo colours and store layout
The franchisor will impose restrictions and rules that the franchisee must follow.
The franchisee pays and annual fee to the franchisor for use of the company name.
If one franchisee makes a mistake it impacts the whole franchise
101
What comprises the public sector?
Westminster Government
Scottish Parliament
Local Government (Local Councils)
102
What two things are in the central government of the public sector?
Westminster Government
Scottish Parliament
103
What services do the central government provide?
Health
Transport
Defence
104
How does the central government get finance?
taxes
105
What are the objectives of the central government?
provide a high quality and efficient service (eg, National Health Service);
to improve society;
to make effective use of taxes.
106
What is the local government?
Local Government (Local councils) are set up by central government (Scottish Parliament) and are run on its behalf by locally elected councillors.
107
Were does the local government get resources and responsibility from?
Central Governments
108
What are the functions of the local government?
education and leisure services
social work
planning and transport
environmental services
housing
finance
information technology
109
How is the local government financed?
government grants
council tax
non-domestic rates
the sale of assets
110
What are public corporations?
These are companies that are owned and controlled by central government.
111
What is the Voluntary third sector?
They are ‘not for profit’ organisations and very often their reason for existing is to help a charitable cause in some way.
112
What are the objectives of the third sector in the public sectors?
To provide a service
To relieve poverty
To fund medical research
To provide protection to the vulnerable
113
How is the third sector in the public sectors financed?
Donations from the public
Donations from companies
Governments grants
Lottery grants
Profits from charity shops
Sponsors
Sale of goods through mail order
114
Charities are part of the third sector of the public sector. What are some well known charities?
Cancer Research UK
CHAS
Kidney Research UK
Oxfam
Save the Children
Age Concern
RSPCA
UNICEF
Barnardos
115
What is business?
Business is the buying or selling of products to make profit.
The economic activity that involves the exchange or purchase of goods to make profit.
116
What is a business?
A business is a company that sells products in order to make money.
An organisation or enterprising entity engaged in commercial, industrial or professional activities.
117
Why do people create businesses?
To drive economic growth.
To generate income.
To foster innovation.
To sell products that improve lifestyle.
To go after dreams.
118
What is the purpose of a business plan?
To outline goals and how it plans to achieve them.
To be a guide for decision - making.
Help stay focused.
Used to persuade banks or investors for funding.
119
The essentials for a business plan.
Business goals.
Market research.
Financial Plans.
Marketing Strategies.
120
What is meant by 'market research'?
The process of gathering and analysing information about customers, competitors and market trends.
Helps understand what products or services people want, how much they are willing to pay and how the business can stand out.
Is crucial for making decisions.
121
What four things are part of branding?
Name
Logo
Slogan
Jingle
122
What does branding do?
Helps raise the value of products.
123
What does a business name contain?
It can have meaning or can be linked to the product or celebrity. The name can mean strength or can have a meaning to come to this business or can have an emotional message.
124
What does a business logo contain?
Shape
Colour
Imagery
125
What does a good business slogan contain?
It can be:
Catchy
Simple
Unique
and can enter day to day speech.
126
How is a good jingle made?
To be a brain worm.
127
What plans are made by the most senior managers.
A plan that includes high level management, contains high risk, high cost and is a 5 - 10 year plan.
128
What plans are opening new stores, offering online shopping or offering home deliveries.
These plans include medium level management, medium risk, medium cost and a 2 - 5 year plan.
129
What plans are staff rotas, product placement in store or offers and discounts.
These plans include low level management, low risk, low cost, day to day work and actions going on for less than 1 year.
130
What questions do you need to solve to complete market research?
Identify Trends.
What the preferred price bands are.
Where do people like to shop.
How do they like to pay.
What is the competition doing.
What promotion works best.
Which people don't like the product.
131
What three words describe market research?
Identify
Anticipate
Satisfy
132
Types of market research.
On the field
Desk research
133
What are the happens by doing market research on the field.
It is carried out by you.
It's expensive.
It's time consuming.
The results are specific.
134
What are examples of doing market research on the field.
Observation
Interview
Survey
Questioning
Hall test
Focus group
135
What happens by doing the desk research for your market research.
It's carried out by another company.
It's free.
It's instantly accessible.
The results may not be fully specific.
136
What are examples of desk research for your market research.
Government websites.
Competitor websites.
Online reviews.
News articles.
137
What makes a good brand?
Prioritising long - term relationships over short sales.
Connecting emotionally with the target audience.
Protecting the investments, market campaigns, market positions, brand values, shapes, colours and consistency.
138
What are the advantages of becoming a franchisee?
You'll set off quickly because it's a well known company.
It's less risky than to set up your own business.
It's easier than managing your own business.
139
What are the advantages of becoming a franchiser?
It's less work than setting up another place.
It's less risky to make someone else set up a place.
It makes the business more recognizable and likeable.
140
Name some popular franchises.
Subway
McDonalds
KFC
Costa
141
Objectives of the Public Sector.
To make effective use of taxes.
To be a high quality service.
To protect the enviroment.
142
Services provided by the Public Sector.
Education
Transport
Health
Defence
143
How Public Sector is funded.
Taxes
Revenue from government businesses.
Taking out loans.
144
Give an overview about customer service.
To survive, businesses must meet the needs and wants of customers.
145
Give some factors of customer service.
Good quality products
Attractive packaging
Product durability
Up to date fashion
Good prices
Good images
Easily available
Guarantees with the product
Good after sales service
146
What are the 4P's?
Place
Product
Price
Promotion
147
What is customer service?
Customer service is the provision of service to customers before, during and after a purchase. In order to ensure that a customer’s needs are met.
148
What makes good customer service?
- Keeping customers well informed of progress and changes.
- Under-promise and over-deliver – do not set expectations too high so that customers will not be upset if they are not met.
- Go the extra mile to ensure customer’s needs/expectations are always met.
149
Why is customer service so important?
- long term benefits
- reputation is enhanced
- Good publicity
- Loyal customers
- More sales
- Attract better employees
150
What is the impact of poor customer service?
- Customers form bad opinions
- Bad publicity
- Poor reputation
- Customers might not come back
151
What is primary market research?
Often organisations survey customers or ask for feedback to ensure that high standards of customer service are being met or to find out if there is any way things can be made better.
152
What are some methods of checking customer service?
- A questionnaire
- Phoning customers
- E - mailing customers
- Having a meeting with the customers
- Face to face interviews
- Fake shoppers
- Suggestion boxes
153
What should a customer survey contain?
- Age of customers
- How often do they go
- What do they buy
- How much they spend
- Are the products what they want
- How good are the staff
- How long is the wait time to be served
154
