Paper 1 Flashcards
(29 cards)
What is the dynamic nature of businesses?
Businesses innovate in response to tech changes, consumer trends, or obsolescence to keep up with the competition
What are the risks and rewards of entrepreneurship?
Risks include failure and financial loss; rewards include profit and independence.
What is the purpose of a business?
To satisfy customer needs and add value through quality, branding, and convenience.
What should businesses focus on to spot a business opportunity?
Customer needs: price, quality, choice, and convenience.
What are primary sources of data?
Surveys, focus groups, observations.
What are secondary sources of data?
Internet, reports, government statistics.
What types of data should businesses use?
Both qualitative and quantitative data; ensure reliable sources.
How can markets be segmented?
By demography, location,gender,age and income.
What is the competitive environment?
Compare on price, quality, service; use findings to shape strategy.
What are financial aims and objectives?
Profit, survival, market share.
What are non-financial aims and objectives?
Personal satisfaction, independence.
How is revenue calculated?
Revenue = price × quantity.
What are the components of costs?
Fixed costs + variable costs lead to total costs.
How is profit calculated?
Profit = revenue - total costs.
What is cash flow?
Inflows vs outflows; predict using forecasts.
What is the difference between cash and profit?
Cash flow refers to actual cash movement, while profit is accounting-based.
What are short-term sources of finance?
Overdrafts, trade credit.
What are long-term sources of finance?
Savings, loans, venture capital, retained profit, crowdfunding.
What should be considered when choosing a business structure?
Weigh pros/cons of sole traders, partnerships, companies, franchises; understand limited liability.
What factors influence business location?
Market access, labour, costs, materials, and e-commerce trends.
What is the marketing mix?
Product, Price, Place, Promotion; interconnected decisions tailored to environment and customer needs.
What should a business plan outline?
Idea, market, objectives, financial forecasts, marketing, and funding strategy to reduce risk.
Who are stakeholders in a business?
Owners, employees, customers, suppliers, community; each with different objectives; conflicts possible.
How does technology influence business?
Enhances e-commerce, marketing, payment; can reduce costs and drive growth.
