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GSCE OCR BUSINESS > Topic 1 - Business Activity > Flashcards

Topic 1 - Business Activity Flashcards

(51 cards)

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1
Q

What is an entreprenuer?

A

A person who spots the opportunity to start and run their own business enterprise

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2
Q

Why do people choose to start their own business?

A
  • to be your own boss
  • to pursue own personal interests
  • to earn an income
  • to do something positive for society
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3
Q

What are the main characteristics of an entreprenuer?

A

Creative, Risk-taking, Determined, Confident

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4
Q

What are the rewards in starting a business?

A
  • Possibly a higher wage / salary than previous job
  • Being your own boss
  • The personal satisfaction of being successful
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5
Q

What are the risks in starting a business?

A
  • Might have invested your own savings
  • Might have given up a job with a steady
    income
  • Might be very stressful / affect your health
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6
Q

What’s a business plan?

A

details on how a business aims to achieve its objectives

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7
Q

What is the purpose of a business plan?

A
  • to reduce the risk of starting a business
  • to help a business succeed
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8
Q

What is the role of a business plan?

A
  • identify markets
  • helping w finance
  • identifying needed resources
  • achieving aims + objectives
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9
Q

What are the contents of a business plan?

A
  • aims + objectives
  • marketing plan
  • H.R plan
  • finance plan
    -competition
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10
Q

What is a sole trader?

A

a business owned and controlled by one person

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11
Q

What is an advantage of a sole trader?

A
  • low start-up costs
  • the owner keeps 100% of the profit
  • the owner makes all of the decisions
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12
Q

What is a disadvantage of a sole trader?

A
  • unlimited liability
  • lack of continuity – if the owner dies, the business dies
  • a lot of responsibility on one person
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13
Q

What is unlimited liability?

A

the owner is personally responsible for the debts of the business (might have to use own personal finances such as savings, house & car)

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14
Q

What is a partnership?

A

a business owned and controlled by 2 or more people

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15
Q

What is an advantage of partnerships?

A
  • more skills
  • easy to set up
  • shared workload
  • more capital available
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16
Q

What is a disadvantage of partnerships?

A
  • shared profit
  • unlimited liability
  • shortage of capital
  • slower decision making
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17
Q

What is a deed of partnership?

A

a legally binding agreement which sets out the rules of the partnership

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18
Q

What is a sleeping partner?

A

someone who only invests in a partnership

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19
Q

What is an LTD?

A
  • a private limited company
  • an incorporated organisation owned by shareholders
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20
Q

What is an advantage of an LTD?

A
  • limited liability
  • can raise more capital easily
  • control over share sale
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21
Q

What is a disadvantage of an LTD?

Study These Flashcards
A
  • complex and expensive to set up
  • sale of shares is restricted
  • dividends have to be paid
22
Q

What is capital?

Study These Flashcards
A

money raised to start or develop a business

23
Q

What are dividends?

Study These Flashcards
A

money paid to shareholders from business profits

24
Q

What is limited liability?

Study These Flashcards
A

the owners are NOT personally responsible for paying the debts of the business; the owners and the business each have a separate legal identity

25
What is a PLC?
- public limited company - an incorporated organisation owned by shareholders
26
What is an advantage of a PLC?
- can raise large amount of capital - easier to borrow money - limited liability
27
What is a disadvantage of a PLC?
- possibility of takeover - complex and expensive to set up - hard to manage as so large
28
What's an aim?
a longterm goal
29
What's an objective?
a smaller goal or target that helps a business work towards their aim
30
What are the three main objectives of a business?
- to survive - to make a profit - to expand
31
Why should a business set objectives?
- so that all employees are working towards a common goal - to help measure the success of a business at the end of the year - so that employees can be given clear and relevant targets, and rewarded when they meet them
32
What would an objective of a new start up business be?
to survive
33
What would an objective of an established business be?
to make profit and expand
34
What would an objective of a multinational business be?
to maximise profits and achieve global denomination
35
What's a stakeholder?
an individual or group of people who have an interest in the business
36
What are some internal stakeholders?
- owners/shareholders - managers/employees
37
What are some external stakeholders?
- customers - suppliers - local community - government - interest + pressure groups
38
What are the aims + objectives of workers?
- want job security - want high wages/ good working conditions - want the business to continue, grow + make profit
39
What are the aims + objectives of owners/shareholders?
- want high profits to gain dividends - wants business to grow, survive and make profit
40
What are the aims + objectives of customers?
- want low prices - want lots of variety - want good locations - good quality products
41
What are the aims + objectives of suppliers?
- to be paid on time - good contracts w business - large orders
42
What are the aims + objectives of the government?
- business to help improve economy - wants business to create jobs - wants the business to pay more in taxes
43
What are the aims + objectives of the local community?
- want jobs - low noise and no pollution - contribute + support events
44
What are the aims + objectives of pressure groups?
- land to be protected - low pollution - business to be economically friendly
45
What is organic growth?
the growth of a business internally e.g by increasing sales of products + services
46
What are some organic growth methods?
- increasing output of existing products - gaining new customers - developing new products - increasing market share
47
What is external growth?
the growth of a business by merger or take over
48
What is a horizontal takeover/merger?
To takeover / merge with a company in the same line of business
49
What is a backwards vertical takeover/merger?
To takeover / merge with a company which can supply you with goods
50
What is a forwards vertical takeover/merger?
To takeover / merge with a company which you can sell your goods to
51
What is diversification?
To takeover / merge with a company in a completely unrelated industry

GSCE OCR BUSINESS (6 decks)

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