UNIT 1 Flashcards
(53 cards)
why do businesses exist
•profit
• to sell their products
• providing services
• provide jobs
what does a mission statement communicate?
• what does your company do
• why does ur company do this
• how does your company do this
advantages of business setting objectives
• increases motivation
• organisation
• measuring success
why is the acronym SMART used
SMART is used as a way to set goals within a business
how do i increase profit?
increase revenue or decrease costs
to decrease costs
• move to a cheaper premises
• use less electricity
•find a cheaper supplier
to increase revenue
• increase/ decrease prices
• advertise
advantages and disadvantages of a sole trader
advantages
• keep all profit
• easy to set up
• owner has all control
disadvantes
• longer hours
• unlimited liability
• people reluctant to give you money
advantages and disadvantages of a private limited company
advantages
• limited liability
• keep control over business when selling shares
• can sell shares
disadvantages
• takes time
• profit is shared with shareholders
• higher costs
adv and disadv of a public limited company
advantages
• limited liability
• more reliable to lender
• public awareness
disadvantages
• risk of being taken over
• shareholders have more control
• finance published
4 influences of share price
- less employees
- taken over
- cost of living
- announced profit
whats a public limited company?
A business that can sell its shares to the public on the stock exchange and is owned by shareholders.
whats a private limited company
An LTD is where ownership is split into shares held by private shareholders. The company has a separate legal identity, shares cannot be sold to the public only family and friends
whats a private sector
The private sector is the part of the economy that is owned and run by individuals or private businesses, not the government. Its main aim is usually to make a profit.
whats a sole trader
own and run by 1 person
whats a partnership
working with another company, 2-20 people can be involved
primary sector
extracting raw materials
secondary sector
manufacturing; making things with materials
tertiary
services such as police
quaternary
office jobs/ ICT
tangible products
products we can physically touch
intangible products
something you cannot physically hold eg: services
difference between fixed costs and variable costs
variable costs changes with output eg: wages, raw materials. fixed cost doesnt change: rent, utilities
whats a business
a business is an organisation that transforms inputs into outputs to be purchased by customers. they can have a profit or a non profit drive
