Unit 1 Flashcards
(24 cards)
Identify and describe the 3 business sectors
Tertiary - service supply
Secondary - Manufacturing, construction, gas / water supply
Primary - Agriculture, forestry, etc
What is a mission statement?
A statement that sets out the business’s purpose and often discloses other information such as aims, the business’s values, methodology, etc
What are aims?
Long term plans, usually qualitative, from which objectives are derived
What are objectives?
Quantitative medium-long term targets that aim to support the mission. They should meet the SMART framework
S.M.A.R.T. stands for what? and is what?
S. Specific
M. Measurable - quantifiable
A. Agreed - Mutually agreed throughout the business
R. Realistic
T. Time specific - How long do employees have?
- Framework for objectives
What are fixed costs?
Costs that do not alter when the business alters its level of output e.g. rent
What are variable costs?
Costs that alter directly with the level of a firm’s output e.g. raw material costs
What are total costs?
Fixed costs + Variable costs
What is revenue aka turnover and its formula?
A business’s income over a period of time
Revenue = quantity sold x average selling price
Formula for profit?
Total revenue - costs
What is a profit margin?
The % of final selling price that is profit
What is unlimited liability?
When an individual e.g. sole trader or a group of individuals are responsible for all actions of their business - e.g. they lose personal assets if business debt is unable to be paid - private sector only
What is a company?
A business that has gone through incorporation giving it legal identity and limited liability meaning shareholders personal belongings are safe
Describe private limited companies
/4 points
- Have Ltd after their name
- Have limited liability
- Owners decide who can buy shares
- The option for owners looking to retain control and enjoy profits
Describe public limited companies
/4 points
- Have plc after their name
- Shareholders can sell their shares to anyone (allows for takeovers)
- Allows free use of stock exchanges to buy and sell shares
- The option for businesses trying to raise capital, reap the benefits of publicity and/or take over other companies
What is market capitalisation?
The total value of the issued shares of a company
What are the 3 main elements of the public sector?
- Public corporations - State owned enterprises e.g. Channel 4 that offer products to the public and private sector businesses
- Public services e.g. NHS
- Municipal services - Offered by local government e.g. leisure centres
What are mutual businesses?
Businesses ran for the benefit of their members e.g. employees, customers, local community, etc
What are co-operatives?
/
-An example of mutual businesses that are run by equally empowered members
-Reflect values such as honesty and social responsibility
What is a sole trader?
A business owned and managed by 1 person (but can employ people) - usually small
What are the components of the external environment?
/5
- Market conditions
- Incomes
- Interest rates
- Demographic factors
- Environmental issues
The environmental protection act of 1990 did what for UK businesses ?
Aimed to decrease business pollution by introducing the notion of integrated pollution control ( as controlling a single stream of pollution is pointless as damaging one part of the environment damages it all ) - breaches can result in fines or even criminal prosecution
What is Fair trade?
A social movement that exists to promote improved trading terms for producers in less-developed countries resulting in fair trade tagged products which businesses can sell
The proportion of people aged 85 will what over the next 25 years?
Double
