Flashcards in Topic 1-Business Activity Deck (66)
Why do businesses exist?
Businesses exist to satisfy the needs and wants of customers. They provide goods and services at a price that people are willing to pay, in return for a profit.
What are goods?
Goods are tangible, physical items.
What are services?
Services are intangible.
Does spotting an opportunity have to be a new idea?
What is spotting an opportunity?
The ability to see the need for a particular product or service that customers want.
What is an entrepreneur?
A person who sports an opportunity to help run their business and has enterprise skills to help them become successful.They take a risk in the hope of making a profit.
Give 3 characteristics of an entrepreneur.
Why do we need entrepreneurs?
-To create jobs.
-To help economic growth.
-Greater choice for customers.
What is a financial risk?
Losing all of the money that you have invested. If you have borrowed money you could be in debt.
What is a health risk?
The risk of overworking because of stress, long hours and hard work.
What is a relationship risk?
The risk of not having enough time to spend with your family or even if you are with them not being fully focused on your time together.
What is a time risk?
The risk of not having enough time for yourself.
What is a failure risk?
The risk of you business having to close and so losing reputation.
What’s an independence reward?
The reward that you can choose what you do and when you do it.
What is the self satisfaction reward?
The reward of feeling achievement for making your business.
What is the reward of changing customer habits?
You change the products that they may use to perhaps more healthier ones.
What is a financial reward?
Making a profit.
How can risks be reduced?
-Create a business plan.
-Speak to experts.
What is a contingency plan?
Keeping money aside so you have a backup plan incase you run out of money.
Why is speaking to an expert a good idea?
They may pick up on faults in your product.
What is an aim?
A long term goal a business wants to achieve.
Give 5 examples of an aim.
-Providing a service.
What is an objective?
A step a business will take to work towards achieving its aim.
What does market share =?
Market share=The sales of 1 business divided by the sales of 1 market.
What is limited liability?
There is a limited amount they can lose because they can only lose what they invest.
What is unlimited liabilty?
When there is no limit as to how much a business can use.
What is capital?
The money invested in a business.
Give the four types of businesses.
-Public limited company.
-Private limited company.
What are the advantages of being a sole trader?
-Easy to set up.
-You are your own boss.
-You get to decide what happens with the profit.