Theme 1 Rev Cards

Question 1

Bread and butter topics:

Question 2

Why new business ideas come about

Answer 2

Change in technology
Changes in consumer taste
Product becoming obselete

Question 3

How new business ideas come about

Answer 3

Original idea
Adapted existing product/ service

Question 4

Impact of risk on a business

Answer 4

Business failure
Financial loss
Lack of security

Question 5

Impact of reward on a business

Answer 5

Business success
Profit
Independence

Question 6

Purpose of business

Answer 6

Produce goods or service
Meet customer needs
Add value

Question 7

Role of an entrepreneur

Answer 7

Organise resources
Take risks
Business decisions

Question 8

What are customer needs

Answer 8

Price
Quality
Choice
Convenience

Question 9

Market research

Question 10

Whats point of market research

Answer 10

Identify gaps in the market, reduce risk and inform business decision

Question 11

What is primary research?

Answer 11

The collection of original data and info for a specific purpose

Question 12

Types of primary research

Answer 12

Surveys, questionnaires, focus groups

Question 13

What is secondary research

Answer 13

Second hand research

Question 14

Types of secondary research

Answer 14

Internet
Market report
Government report

Question 15

What is qualitative & quantitative data

Answer 15

Qualitive not numerical data or info. Looking for quality and observations

Quantitative data measured in numbers

Question 16

Segmentation

Question 17

What are the various segments the business may target

Answer 17

Location, demographics, lifestyle, income and age

Question 18

How do u find market research in a business

Answer 18

Market mapping

Question 19

Competitive environement

Question 20

Factors businesses will compete on

Answer 20

Price, quality, product range, location, customer service

Question 21

Aims and objectives

Question 22

Financial aims and objectives

Answer 22

Financial:
Survival, Profit, grow sales, grow market share, financial security

Question 23

Non financial aims and objectives

Answer 23

Social objectives, personal satisfaction, challenge, independence, control

Question 24

Formula for profit

Answer 24

Profit= revenue - total costs
Total costs= total variable costs + fixed costs
Total variable costs= variable costs per unit x amount of units
Break even point in £= BEP x Price
Margin of safety= actual sales - budgeted sales

Question 25

Break even analysis

Answer 25

If fixed costs go up ➡️ break even output goes higher= bad If Fixed costs go down➡️ break even output lower= good

Question 26

Break even point analysis

Answer 26

Cons: only an estimate Pros: make production and pricing decision If FC goes up➡️ break even output higher= Bad If FC goes down➡️ break even output lowers= good

Question 27

Break even point analysis

Answer 27

Cons: only an estimate Pros: make production and pricing decision If FC goes up➡️ break even output higher= Bad If FC goes down➡️ break even output lowers= good

Question 28

Cash flow

Question 29

Why is cash flow important

Answer 29

Important to pay suppliers- employees , reduce risk of business failure

Question 30

Cash flow formulas

Answer 30

Net cash flow= inflows - outflows Opening balance= closing balance of previous period Closing balance= opening balance + net cash flow

Question 31

Sources of finance

Question 32

Short term sources of finance

Answer 32

Overdraft & trade credit

Question 33

Long term source of finance

Answer 33

Personal savings, venture capital, share capital, loans, retained profits, crowdfunding

Question 34

Limited liability

Answer 34

Limits the losses of a company’s owners to the amount of their investment

Question 35

Pros of running a franchise

Answer 35

Proven business model, already has brand recognition, support from franchisor- expertise, less risk

Question 36

Cons of running a franchise

Answer 36

High start up fees, have to pay royalties, lack of flexibility

Question 37

Marketing mix

Answer 37

Price- what do you charge Promotion- where/ how you promote Product- what is unique about your product? Place- how does the customer purchase it?

Question 38

Legislation

Question 39

Point of consumer law?

Answer 39

Ensure quality is there and consumer rights are up held

Question 40

What is the point of the employment law?

Answer 40

To ensure employees are protected in terms of pay, recruitment, no discrimination And the workplace is safe

Question 41

Economy

Question 42

What is the impact of increase interest rates?

Answer 42

If businesses have debts- higher interest repayments- higher costs- less profit

Question 43

Impact of increase exchange rate

Answer 43

Spice Strong pound imports cheap exports dear Good for businesses that import for businesses that export