unit 1 Flashcards
(24 cards)
what is cost efficiency?
- the most common objective in transport and constructive industries where goods and services make up 70% of the cost of the product.
- decrease the cost of production = more profit
what is an objective?
the specific and short term steps a business needs to take to achieve their aim in the long term
what is profit satisficing?
when an entrepreneur aims to make just enough profit to keep the business moving (so the entrepreneur is satisfied) plus another aim at the same time
what is the difference between revenue and costs?
profit
what does survival mean in business and why would it be an objective for a business?
- keeping the business operating for a set period of time
- establish itself in the market
- reach a sustainable level of sales so the business can reach its BEP
- maximise profit to survive early years and all business decisions hinge on profit
define business uncertainty
businesses cannot predict what will happen in the future
for example:
- pandemic
- war
- Brexit
what is an example of a political barrier to entrepreneurship?
an unstable political landscape
define break even point
where the money going in to the business is equal to the money going out so neither a profit or a loss is being made
what are examples of economic barriers to entrepreneurship?
- taxation
- market entry regulations
what are examples of financial barriers to entrepreneurship?
- lack of start up capital
- lack of cheap labour
- lack of investment
what are the barriers to entrepreneurship?
- personal
- financial
- economic
- political
what is an intrapreneur?
an employee within a larger business who thinks like an entrepreneur
what is a sole trader?
a person who owns and runs a business alone, however they can employ as many staff as they wish
what are the stages in setting up a business?
- idea
- research
- planning
- financing
- location
- resources
- launch
why might survival be a business’ only objective?
- new business
- need to cover costs and break even
- they have difficulties
what is market share?
- a group of companies within the same market (e.g Mcdonald’s, KFC, Burger King, Subway)
- gaining a high market share (fewer competitors) would increase revenue and the raise profile of the business in the market.
- more sales = more profit
what are SMART objectives?
Specific
Measurable
Achievable
Relevant
Time based
what is employee welfare?
- caring for employee’s welfare
- some businesses seek harmonious relations with their workforce and they aim to achieve this through incentives or motivational techniques
what is customer satisfaction?
- ensuring customers are satisfied.
- common in the service industry, businesses who seek to monitor customer service will focus on quality
what is profit maximisation
- increasing profit as much as possible
- a business may increase price and reduce costs to achieve this
define market
- the audience of a business/ who the business is aimed at.
- where sellers meet buyers
define stakeholder
a person who is interested in a business
what is an aim
a generalised goal that the business wishes to achieve
what is sales maximisation?
- where a business increases their sales to the maximum
- doesn’t necessarily mean more profit
- might do a sale to achieve this
