Understanding Business Flashcards
(32 cards)
Needs
Needs are something that you must have and are very important to live and survive. eg water, heat, shelter
Wants
Wants are something that you desire but you do not have to have them to survive. They are extras to spice up your life. eg phone, car, laptop.
Service
Something you cannot touch and when someone does something for you for money.
Goods
Goods are objects you buy and things you can touch.
How do businesses satisfy wants and create wealth?
Business produce goods and services to satisfy the wants of humans and in return gain profit for producing/supplying the business.
Land
Natural resources
Labour
Human effort in a business. Human resources
Capital
Man-made goods to produce other goods and services
The Four Factors of Producton
The factors of production are land, labour, capital and enterprise. Various resources which contribute to the producing of goods and services.
The Business Cycle
- Consumers have WANTS
- Market research finds out what consumers want.
- Business produce goods and service
- Costumers buy goods and services
And then back to the beginning
The Three Sectors of Industry
Primary - Business extract natural goods from the earth. eg Fisherman, farmers, coal miners
Secondary - Business that are involved with making things (manufacturing). eg shipbuilding, construction, factories.
Tertiary - Businesses that do not produce goods but provide services. eg Shops, window cleaners, hairdressers.
The Three Sectors of Economy
Private - Businesses that are set up by individuals called sole traders, a group or a couple of people called partnerships or a Private Limited company that is owned by shareholders and run by a board of directors.
Public - Everything that is in the economy controlled by the state that is given to their citizens for free regardless if they pay for it or not. eg police, fire brigade, schools, army.
Third - The part of the economy that is run by people voluntary and has no profit intake. eg Charities, voluntary organisations.
Sole Trader
A business in the private sector of economy which is run by an individual to make as much profit as possible but is funded mostly by themselves and can be in any of the sectors of industry.
Partenrship
A business in the private sector of economy which is run by 2-20 people to make as much profit as possible to be shared between them and is funded by everyone in the partnership and can be in any of the sectors of industry.
Private Limited Company
A business in the private sector of economy which is owned by shareholders and run by a board of directors and its aim is to make as much profit as possible to be shared out to the shareholders depending on how big their stake is in the business. It is funded by shareholders, as they give the company some money to start or run the business in exchange for a stake in the business. It can be in any of the sectors of industry.
Charaties
A business in the third sector of economy. A company that has no profit intake and its goal is to raise as much money for things in need as possible. It is run by people called trustees which have the same liability as shareholders. It is funded by bank loans, the general public, etc. It is in the tertiary sector of industry.
Social Enterprises
A business in the private sector of economy. A social enterprise is a business that is set up, often as a limited company, and run for social and/or environmental purposes rather than to make shareholders or owners wealthier. It is funded by the profits of the company, selling shares, banks loans, government grants and loans. It can be in any of the sectors of industry.
Public Organisations
Public sector organisations are things such like your local council or government that are elected by the public. They appoint managers or directors of services to run the council departments. Local councils are large employers therefore making them a very large business. They are financed partly through local taxation called council tax and also partly from central government, they also receive money from services that they run such as local swimming pools and sport centres. They are in the third sector of economy and the tertiary sector of industry.
Skills and Qualities of an Entrepreneur
Determined, Negotiative, Organised, Persuasive, Risk Taking, Creative. Able to take an idea and turn it into a business.
Enterprise
The entrepreneur who combines land, labour and capital together to run a business to meet our needs and wants.
What are the definitions for the business objectives Profit, Survival and Growth?
Profit - To maximise how much profit you can make out of the business.
Survival - This is were you want to make enough profit to keep your business going and not to be taken over by larger businesses. This is the most important aim for small businesses.
Growth - This aim is to become larger and to increase your market share.
What are the definitions for the business objectives Provision of a Service, Customer Satisfaction and Enterprise?
Provision of a Service - This is were you aim to provide help and a good service to your customers at all times. Normally businesses have skilled workers to ensure that their provision of a service is high.
Customer Satisfaction - This is the amount of satisfaction gained from a customer after buying or using a good or service from a business. This is also measured in how many times a customer revisits a business.
Enterprise - This objective means to be original and willing to take on new ventures.
How do businesses maximise customer service?
Businesses maximise customer service by making sure they are attentive to their customers at all times and that they provide the help or information that the customer needs immediately. Businesses also maximise customer service by making sure they are on time and presentable for the customers when they are asked for. Businesses also can maximise customer service by making sure they have the rightly skilled employees to help out the customers in various areas.
How is customer service important to business success?
Customer service is key to business success because if you don’t have good customer service then you will make a much less profit than you could have if you had good customer service. If you don’t have good customer service then customers are less likely to come back and recommend your business to others, they might in fact make a bad reputation for your business. This is turn will lower your sales and you will make less profit.
