Understanding business

Question 1

What is a need?

Answer 1

something required to live

Question 2

What is a want?

Answer 2

a desirable item that makes life more comfortable or enjoyable

Question 3

What is a good?

Answer 3

something that it tangible such as a phone or laptop

Question 4

What is a service

Answer 4

something that is intangible such as NHS and Police

Question 5

What is wealth creation?

Answer 5

adding value to a product as it goes along the production process

Question 6

What are the factors of production?

Answer 6

Land
Labour
Capital
Enterprise

Question 7

What is land?

Answer 7

natural resources that the business extracts from the earth such as coal oil and fish

Question 8

What is labour?

Answer 8

the workforce such as the employees and HR

Question 9

What is capital?

Answer 9

the man made resources such as finance and machinery

Question 10

What is enterprise?

Answer 10

when the entrepreneur uses all FOP to create a goods or services

Question 11

What are the sectors of industry?

Answer 11

Primary Sector
Secondary Sector
Tertiary Sector

Question 12

What is the primary sector?

Answer 12

business that extract natural good from earth such as fisherman, lumberjacks and farmers

Question 13

What is the secondary sector?

Answer 13

businesses that manufacture products such as factories, construction and shipbuilding

Question 14

What is the third sector?

Answer 14

business that aim to provide a service such as shops,hotels and hairdressers

Question 15

What are the sectors of economy?

Answer 15

Private Sector
Public Sector
Third Sector

Question 16

What are types of businesses in the private sector?

Answer 16

Sole Traders
Partnerships
Private Limited Companies

Question 17

What is a sole trader?

Answer 17

someone who sets up and runs a business on there own. Usually a small business such as a painter or hairdresser

Question 18

What are advantages of being a sole trader?

Answer 18

Owner gets all the profit

Owner makes all the decisions

Question 19

What are disadvantages of being a sole trader?

Answer 19

Owner can’t share workload

Owner has limited liability

Question 20

What is a partnership?

Answer 20

a business that is set up and run by between 2-20 people

Question 21

What are advantage of a partnership?

Answer 21

shared workload

easier to get finance

Question 22

What are disadvantages of a partnership?

Answer 22

possible disagreements

shared profit

Question 23

What is a private limited company?

Answer 23

a business with privately owned shares, must have a minimum of 2 shareholders and is run by a board of directors

Question 24

What are advantages of a private limited company?

Answer 24

business can’t be lost to outsiders

experience gained from shareholders

Question 25

What are disadvantages of a private limited company?

Answer 25

shares can’t be sold to the public | profit shared

Question 26

What is the public sector?

Answer 26

businesses that are set up by central government and are run by locally elected councillors and they provide a range of services and aim to meet local needs and finance comes from central government and council tax (NHS, police)

Question 27

What businesses are in the third sector?

Answer 27

charities | social enterprises

Question 28

What is a social enterprise?

Answer 28

an organisation that looks to improve social and environmental well-being

Question 29

What is a charity?

Answer 29

they are non-profit organisations that tend to help charitable causes and the money made is invested into the charity

Question 30

What is an advantage of both?

Answer 30

low wage costs as volunteers work for free

Question 31

What is a disadvantage of both?

Answer 31

can be difficult to raise money during difficult times

Question 32

How to measure customer service?

Answer 32

mystery shopper, loyalty cards, satisfaction survey

Question 33

What are examples of business objectives?

Answer 33

profit maximisation growth survival customer satisfaction

Question 34

What are external factors?

Answer 34

factors out with the business

Question 35

What are external factors? (PESTEC)

Answer 35

``` Political Economic Social Technological Environmental Competitive ```