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understanding business Flashcards

(102 cards)

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1
Q

what are the 4 facts of production

A

capital, enterprise, land and labour

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2
Q

describe and give an example of capital

A

manmade resources that are used to produce your product or provide a service
~money, machinery, buildings

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3
Q

describe enterprise in the factors of production

A

the entrepreneur behind the business who has the idea, takes risks and invests there own money

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4
Q

describe and give an example of land in the factors of production

A

the natural resources taken from the earths surface
~soil, fish, food, coal

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5
Q

describe and give an example of labour in the factors of production

A

the employees and workers who contribute to the production of a good or service

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6
Q

describe and give an example of a good

A

a good is something you can physically touch and see.

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7
Q

describe and give an example of a service

A

a service is something you cannot see or touch. They are experiences provided by other people

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8
Q

describe and give an example of a durable good

A

a durable good is a good that is long lasting and you can use it over again.

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9
Q

describe and give an example of a non-durable good

A

a non-durable good is a good which is used for a short period of time usually once

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10
Q

list 5 reasons a business exist

A

~to make a profit
~to provide a service/gap in the market
~to be your own boss
~the owner doesn’t currently have a job
~to develop a hobby

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11
Q

describe and give an example of a need

A

an essential we must have to survive
~food, water, shelter, clothing

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12
Q

describe and give an example of a want

A

a luxury that adds comfort or pleasure to our live + you can live without them
~bags, holidays, jewlary

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13
Q

describe and give an example of primary in the sectors of industry

A

a business that extract natural resources from the land
~ farming, fishing, mining

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14
Q

describe and give an example of secondary in the sector of industry

A

a business that takes the product from a primary business and it turns it into/manufactures new products
~food production and car manufactures

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15
Q

describe and give an example of third in the sectors of industry

A

a business that provides a service
~hairdresser, chef, gardener

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16
Q

describe the features of a private business

A

owned-by a private individual
controlled- private indavidual/indaviduals, board of directors
finace- share holders, bank loan, personal funds
objective- make a profit

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17
Q

describe the features of a public business

A

owned- by government on behave of the tax payers
controlled- by government by elected mps+officials
finaced- through tax
objective- use tax payers money wisely and provide a service

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18
Q

describe the features of a third business

A

owned-volinteers and trustees
controlled- by board of trustees
financed- fundraisers or donations
objective-support a worthy cause or to help those who need it

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19
Q

types or organisations in the private sector (3)

A

sole traders, partnerships and private limited companies (LTDs)

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20
Q

types or organisations in the public sector (4)

A

healthcare, education, police and army

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21
Q

types or organisations in the third sector (3)

A

social enterprise, charities and voluntary organisations

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22
Q

3 benefits of good customer service

A

loyal customers, good reputation and employee satisfaction

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23
Q

describe and give an example of quality products and how they maximise customer service

A

a business should have a robust quality assurance process to ensure only quality product reaches the customer

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24
Q

describe and give an example of and how they maximise customer service

A

well trained staff are knowledgeable about the products or services they are selling

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25
describe and give an example of market research and how they maximise customer service.
a business who knows their customers want and needs are more likely to satisfy them ~focus groups
26
describe and give an example of customer complaint procedure and how they maximise customer service
this is a procedure a business should run that handles complaints it should include -how long it will take to respond -how complaints will be handled -how it should be processed
27
what are the 6 types of organisations
sole trader, partnership, private limited(LTD), local governments organisations, social enterprise and their sector organisations
28
name 5 ways a business can measure customer service
review customer complaints review sales/profit figures customer questionnaire (emails/interview/phone call) staff focus groups customer focus groups
29
who owns a sole trader
a private individual
30
who owns a partnership
2 or more private indaviduals
31
who owns a private limited company
shareholders
32
who owns a social enterprise
private individual
33
who owns a local government organisation
government on behave of the tax payers
34
who owns a third sector organisations
trustees
35
who controls a sole trader
a private individual
36
who controls a partnership
2 or more private individuals
37
who controls a private limated company
board of directors
38
who controls a local government organistions
government through local MPs
39
who controls a social enterprise
private individual
40
who controls a third sector organisation
board of trustees
41
how do sole trader get there finace
personal savings, banks loans, government loans
42
how do partnership get there finace
personal savings, bank loans, government grant
43
how do private limited companies get there finace
selling share,bank loans, bank overdreft
44
how do social enterprise get there finace
government grants or investors
45
how do local goverment organisations get there finace
tax payed by the public
46
how do third sector organisations get there finace
donations and fundraisers
47
what's 2 advantages and disadvantages of a sole traders
ad- owner keeps all profit, owner gets to make all the decisions (holidays, start times, product prices) dis-no one to share workload with, unlimited liability
48
what is unlimited liability
if you go into to debt your the one (owner) who may loose personal assets
49
what's 2 advantages and disadvantages of a partnership
ad- can share workload, brings together different skill and ideas and experiences dis- must split profit, disagreements most likely to occur
50
what's 2 advantages and disadvantages of a private limited company
ad- limited liability, easy to raise finase dis- more complicated to set up, set up costs are expensive
51
what's 2 advantages and disadvantages of a local government organisation
ad-
52
give an definition of entrepreneur
some who sets up a business, taking finical risks in order to make a profit
53
3 skills and qualities of an entrepreneur
skills-creativity, communication, decision making quality- determined, hard working, willing to learn
54
what is the definition of a business plan
a business plan is a document that sets out the aims and objective of a business and how it plans to achieve them. purpose ~can be used to work out if a business is going to . profitable . ~can be used to attract investors or to secure a . . loan from the bank
55
4 objectives of a business
survival profit personal of a service customer satisfaction
56
description of the business objective survival
usually the first objective a business has it means to continue trading every business aims toto survive so it is often a new business objective for the first few years
57
description of the business objective profit
the main objective of a business in the private sector-to make as much profit as possible means to have more income then costs (profit) once a business is a profit the objective, often changes to profit maximisation
58
description of the business objective providing a service
this means to provide people with the service they want this is would be an example an important objective for a public sector organisation for example east Dubartonshire council want to provide a high quality education service to young people in EDC
59
description of the business objective of customer satisfaction
this means to ensure customer are happy with product and service provided one of the major aims to customer satisfaction will show loyalty and return to purchase from the business
60
name the 8 sources of finance
bank loan mortage government bank overdraft share issue leasing personal savings/owners investment retained profit
61
what is owners investment/personal savings
finance that is invested by the owner from personal funds.
62
what is retained profit
profit that is made by the business in previous years that is reinvested back into the business
63
what is a bank overdraft
a bank overdraft allows a business to withdraw more money from a bank account that is available, which they have to pay back
64
what is a bank loan
a sum of money borrowed from the bank which is payed back over time in monthly instalments with added interest
65
what is a mortgage
a sum of money brewed from the bank that is secured against a property, which is paid back in instalments usually over a long period of time
66
what is government grant
a grant (a fixed amount of money) which is awarded to a business who meet a set list of criteria
67
what is share issue
LTDs can decide to issue more shares in the company and obtain finance from the sale
68
what is leasing
leasing is a way of renting an asset that the business requires, such as a company car. monthly payments are made to the company leasing and they are responsible for the provision and up keeping of the leased item
69
what are advantages and disadvantages of personal savings
ad~finace does not need to be payed back, there is no interest payed saving the business money, the owner has full control of the business as they invested there own money dis~personal savings may be lost if the business fails
70
what are advantages and disadvantages of retained profit
ad~finace does not need to be payed back saving the organisation money dis~it can take a long time for profits to be built up in order for the profits to be used in this way, the business may miss opportunities waiting for the reinvestment to be built up
71
what are advantages and disadvantages of bank loan
ad~can be arrested quickly, loans can be payed back over a long period of time dis~interest has to be payed back on top of the original loan, not much finace can be borrowed at one time
72
what are advantages and disadvantages of a bank overdraft
ad~can be arranged quickly meaning it is suitable for a short-term cash-flow problems dis~can be expensive to be payed back as it has a high daily interest rate, usually only for small amounts of finace
73
what are advantages and disadvantages of a mortgage
ad~ can be paid back over a long period of time dis~ interests is charged so repayments will increase, property can be lost to mortgage lender if repayments are missed
74
what are advantages and disadvantages of a government grant
ad~ finace does not need to be payed back dis~the business needs to meet a certain list of criteria to receive the grant, its very time consuming to apply and complete paper work for grants
75
what are advantages and disadvantages of share issue
ad~ finance doesn't need to be payed back, large amounts of finance can be raised quickly dis~shareholders need to be payed dividend yearly, shareholders become part owners which can cause control to be lost as they will be involved in decision making
76
what are advantages and disadvantages of leasing
ad~ assets can be acquired without having to pay a large sum of money dis~overtime it can be an expensive way to obtain assets as monthly payments are required
77
name the 6 external factors
political economical social technological environmental competitive
78
describe and give an example of political as an external factor
the government has the ability to change laws and tax rate which the business must comply to
79
describe and give an example of economical as an external factor
factors related to inflation and interest rates ~recssion meaning less people employed
80
describe and give an example of social as an external factor
this relates to society as a whole ~trends attitudes tastes and fashion
81
describe and give an example of technology as an external factor
technology is rapidly changing meaning a business must keep up to stay relevant with customers ~self checkouts
82
describe and give an example of environmental as an external factor
this relates to environmental changes, recycling and climate change
83
describe and give an example of competitive as an external factor
this relates to a businesses competitors ~other shops in the area
84
explain one impact government has on a business
if the government increases national minimum wage rates the impacts would be less profit made as the business would have to comply and pay staff more resulting in less profit
85
explain one impact economic external factors has on a business
in a global rescission people will have less money resulting in less customers meaning less profit for the business
86
explain one impact social external factors has on a business
if something is in trend it will it will mean more for a business meaning more profit
87
explain one impact of technological external factors has on a business
if a business is out dated with technological they wont be as appealing to customers
88
explain one impact of environmental external factors has on a business
if a business is solely based outdoors and there are heavy storms the business may have to close for the day
89
explain one impact of competitive external factors has on a business
if the competitor lowers there prices they may loose customers to the competitor
90
define the term stakeholders
a stakeholder is anyone who has an interest in the success or failure of a business or organisation
91
what is the interest of an owner as a stakeholder
they are interested in getting a good return in investment
92
what is the interest of an employee as a stakeholder
they are interested in job security and wage rises
93
what is the interest of a customer as a stakeholder
they are interested in buying quality products and services
94
what is the interest of a supplier as a stakeholder
they are interested in the business doing well so they can continue to supply there product
95
what is the interest of a local community as a stakeholder
they are interested in the business providing jobs within the community
96
what influence do owners as and external factor have on a business
they can invest more into the business meaning there is more money for the organisation to buy assets
97
what influence do employees as and external factor have on a business
they can change there work rate meaning they are the depending variable on the product produce
98
what influence do customers as and external factor have on a business
they can choose to go elsewhere with there business resulting in less profit as there are less sales
99
what influence do suppliers as and external factor have on a business
the can choose to put up there prices resulting in the business having to spend more
100
what influence do the local community as and external factor have on a business
they can choose to protest a business if they are unhappy
101
what influence do the government as and external factor have on a business
they can choose to change laws and taxation rates which a business need to comply to resulting in less total profit
102

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