new Flashcards
(39 cards)
What is crowdfunding?
Fianance raised from a large number of people who each invest a small amount
Name two ways HOW business ideas come about
Original ideas, adapting existing products/ideas
Why is it important that market research is reliable?
Products may not meet customer needs >sales fall –> business failure?
What are two disadvantages of being a
private limited company?
Share profits; disagreements between
owners; lose some control
Why is cash important to a business?
To pay suppliers overheads and employees; to prevent business failure
List two ways a business might respond to
inflation
Rise prices, use machinery more than
employees as they may request a pay rise
What is the ‘total cost’ formula?
Total costs = Total fixed costs + Total variable
costs (TC = TFC + TVC)
Why is a business plan important to gain
finance?
A business plan will be used to prove to a
bank that the business will be profitable. The bank will use this to decide if the business is too risky to issue a loan too.
What does the ‘ Consumer Rights Act 2015
protect?
Customers have a right to a product that is
‘fit for purpose’ and ‘as described
Name the five financial objectives
Survival, profit, sales, market share, financial security
What is an advantage of being a
partnership?
Share ideas; share responsibility for debts
What is e-commerce?
Selling products through the internet
Name the five non-financial objectives
Social objectives, personal satisfaction,
challenge, independence and control
What are two advantages of being a private limited company?
Limited liability; can issue shares to friends
and family; can share ideas
What does ‘consumer rights’ mean?
Customers can return a product if they feel that they have been misled over quality or the product is not fit for purpose
Give at least two examples of internal stakeholders
Owners/shareholders; managers; employees
What is meant by the ‘economic climate’
The state of the economy
List three ways that tehcnology has affected costs
Reduces fixed costs as there is no need for a physical building; payment is automated so there is no need to pay employees to manage payment; social media has reduced advertising costs as advertising on social media is often free
List two ways a business might respond to changes in interest rates
Reduce or increase borrowing and investment, finding other sources of finance
What are the two short-term sources of fianance?
Overdraft and trade credit
List at least three things that affect the economic climate
Unemployment, changing levels of consumer income, inflation, changes in interest rates, government taxation, changes in exchange rates
List two digital payment systems
Contactless payment; bank transfer
What are two advantages of franchising?
Selling a tried and tested product (less risk);training and products are already made; access to existing advertising
What is a cash inflow?
Money coming into the business bank account
