Unit 1 Flashcards Preview

Business > Unit 1 > Flashcards

Flashcards in Unit 1 Deck (92):
1

What can market research tell a business

How much a customer is willing to pay
Where they shop
Age,gender
Competitors
If the market is growing or shrinking

2

Examples of primary and secondary research

P- focus groups, surveys,questionnaire, observations

S-internet sites, newspapers, market reports

3

Adv of primary research

More accurate
Up to date
Specific to needs
Qualitative

4

Adv of secondary research

More general
Less time consuming
Effective at quantitive

5

What is market mapping

Helps a business identify market segments position their products through identifying gaps in the market

6

How can a business analysis buying habitats

Find information about customers
Using their own experience
Looking at existing businesses and trying competitors products
Observation and surveys

7

Example of market segments

Gender age income lifestyle life stage

8

What does market segmentation do

Meet specific customer needs
Differentiate their products
Focus on specific groups
Develop a unique brand image

9

Ways to compete

Wider product range
Better design
Higher quality
Enjoyable experience

10

What is a brand

A named product that customers see as being different from other products and they can associate and identify with

11

What is Added value

Increased worth that a business creates for a product , difference between what they pay supplies to the price they charge

12

Ways to add value

USP
better design
Improved quality
Branding
More convenience

13

What is a USP

One way to add value to a product

14

Importance of added value

Paying of costs, higher added value the sooner costs can be paid of, more chance of success, survival and long term growth

15

What is a franchise

The right given by one business to sell goods or services using its name.

16

What is a franchisor

The business that gives the right to sell a product or service

17

What is a franchisee

A business the agrees to manufacture, distribute or provide a branded product, under licence by the franchisor.

18

What is the point of franchising

The expansion of a business through licensing the right for entrepreneurs to set up their own business using name, equipment and products of the franchise in return for a fee or share of the sales revenue

19

Benefits of a franchise

Higher chance of survival
Training provide
Brand image, reputation already established
Expensive market costs covered

20

Drawbacks of franchise

Start up costs expensive
Royalty payments
Complicated application process

21

What is ana enterprise

The initial spark and idea for a business and the willingness by an individual to show initiative take a risk and undergo new ventures

22

What is enterprises

Another world for business

23

What is an entrepreneur

A person who owns and runs their own business and takes risks

24

What are the entrepreneur skills

Take risks
Undergo new ventures
Showing initiative

25

What is important about taking risks

They risk survival, livelihood and money but is important because it creates jobs and wealth in the economy

26

What is thinking creatively

Consider what if
Unique idea
Cheaper production processes
Improved customer service
Better products

27

What is deliberate creativity

Intentional creation of new ideas through recognised and accepted techniques
Mindmaps
Lists

28

What is blue skies thinking

Coming up with ideas to solve problems

29

What is lateral thinking

Involves thinking differently to find new and unexpected ideas

30

Six hats and meanings

White-facts
Blue-thinking what they are thinking
Red-emotions
Green-how to get around a problem
Black-difficulties
Yellow- positives

31

What’s an invention

The thought process using research and development

32

What an innovation

Being the idea to the market

33

Drawbacks of innovation and invention

Risky
Time consuming
Many products fail before they research the market
Some choose to wait to copy other business to reduce the risk of fail

34

What’s a patent

Right of ownership of an invention, design or process when registered with the government

35

What’s a copyright

Legal ownership of material such as books music films which prevent other copying

36

What’s a trademark

The logo symbol or sign or other features of a product of business that cannot be copied by others

37

What is a calculated risk

Putting a numerical value of probability on a risk and the likelihood of it happening

38

Important enterprise skills

Planning
Drive
Thinking ahead
Determination
Seeing opportunities

39

How to work out revenue

Price x quantity

40

How to work out profit or loss

Total revenue - Total costs

41

What does profit help a business do

Survive
Reinvest profits for expansion
Security and savings
Reward employees
Generate wealth for the owner

42

What could a loss lead to

Unable to repay loans
Unable to pay bills such as wages
Cash flow issues
Unable to survive

43

Ways to increase profit

Lower variable costs
Lower fixed costs
Increase the sales price
Increase the quantity of sales

44

What impacts the cash flow

Changes in sales change in demand
Change in costs
Seasonally sales
Business expansion
Change in stock levels

45

What would a bad cash flow affect

Can’t pay debts
Repay bank loans
Pay wages
Raw materials
Promote business

46

Purpose of a business plan

Convince the bank to give a bank loan
Forecast financial projections
Identify customer needs
Competitors
Minimise Risk

47

What goes into a business plan

Overview
Objectives
Market research
Personnel
Finances
Production

48

Long term sources of finance

Share capital
Personal savings
Venture capitalist
Grants
Loans mortgage
Retained profit
Leasing

49

What is selling shares

Part ownership in a business
A start up business that is a limited company can sell shares to potential investors to raise capital, shareholders
They are entitled to share any profits

50

What happens when someone takes a loan

Form of security or collateral against the loan
Bank receive interest making money
May loose their house so very risky if business doesn’t work

51

Short term sources of finances

Bank overdraft
Delayed payments
Credit cards
Factoring
Trade credit

52

How can a business be customer focused

Identify needs
Anticipating needs
Meeting needs

53

What is the product

Must meet the customer needs and have the right features customer wants differentiate their products

54

What’s place

In which way the product is distributed , online or retail stores

55

What is promotion

Communication between the business and customer that makes customers aware of its products
Advertising
Sales
Sponsorship
Public relations

56

What is the price

Must reflect the value of the product and someone the customers can afford
Pay more for special features and higher quality and depends on competitors

57

What is a limited liability

Private limited company have limited liability p, owners and business are separate level entities and debts in the business and the owners can only lose the making they have invested in the business.
Not personal belongings lost

58

What is an unlimited liability

Sole traders are businesses owner by one person, will have an unlimited liability and the owner is legally responsible for any debts of the business
Could lose all personal belongings

59

What is a sole trader

More risk as unlimited liability
100% control
More privacy

60

What is a private limited company

Reduces risk as limited liability
Control depends on the amount of soletraders
Profits shared proportionally between the shares by shareholders
Accounts can be viewed by anyone

61

Why have a legislation

Government can keep track of business
Taxes can be collected
Protect business and customers from illegal activity

62

What are the legal requirements from a small business

Register and trade under a unique name that promotes the business
Keep records of sales, purchases and names of businesses they have worked with
Register HMRC
Pay tax of HMRC

63

Taxes on a small business

Value added tax
Income tax
National insurance contributions
Corporation tax

64

What is VAT

A tax of sales , sell more higher tax

65

What is income tax

Tax on income earned by workers and sole traders

66

What is NIC

National insurance contributions
Tax on earnings of workers linked to state benefits

67

What is corporation tax

Tax paid by limited companies on th profits of the company

68

What is customer satisfaction

Is a measure of how much a business or its products meets customers expectations

69

How can a business get w good customer service

Dispatching order quick
100%accurate with orders
Personal service
Convenient
Polite and friendly
Respond to complaints

70

Benefits of customer satisfaction

Repeat purchase
Loyalty
Change premium prices
Reputation
Differentiate their business and become a USP

71

How to get a repeat purchase

Cheaper prices than competitors
Easier and convenient
Effective customer service
Promotions and special offers
Good communication

72

What is recruitment process

Recruitment documents
Receive applications
Shortlisting
Selection
Training

73

How can a business motivate their workers

Paying fair and competitive wages
Good working conditions
Providing perks
Delegating power and responsibility

74

What is the supply

Amount sellers are willing and able to sell at a given price

75

What is a commodity market

Market for raw materials such as oil

76

What is a goods market

Everyday products

77

What could changing in price of raw materials affect the business

Total costs
Costs go up for customers

78

What are interest rates

Is the percentage reward or payment over a period of time that is given to savers on savings or paid by borrowers on loans

79

Benefits and risks of fixed and variable interests rates

Fixed do not change over time a business could lose out if rates fall
Variable change but can be risky if they go up

80

What does a business pay interest on

Repayments of loans
Any amount overdrawn

81

What happens when interest rates increase

Small businesses less likely to borrow money to start up or expand
Customers are less likely to spend money costs more so consumer spending falls
Business on variable rate may struggle to repay its loans

82

What’s a fall in interest rate lead to

Business will have more money to spend and cash flow may improve
Business may borrow money for start up or expansion
Customers are more likely to borrow money and spend their money . Spending rises

83

What is an exchange rate

The price of buying in a foreign country

84

What’s import and export

Import good brought from abroad
Export goods sold abroad

85

The effects of the fall in value of the pound

Good for exporters, price falls sales increase
Good for tourism
Good for uk businesses as import is more expensive
Bad for importers as more expensive

86

Effect of the rise in the pound

Bad for exporters as price rises sales fall
Bad for tourism
Bad for uk businesses as import cheaper
Good for importers as cheaper

87

What is the business cycle

The fluctuations in the level of economic activity over time

88

Stages of a business cycle

Boom
Slowdown
Recession
Recovery

89

What happens in boom

Consumer and business confidence high
Customers borrow and spend more
Sales increase
Business take on more employees
Business invest and expand

90

What happens in slowdown or recession

Consumer and business confidence low
Spend less
Sales fall
Business make some employees redundant
Businesses save and cut back on spending f
Cash flow problems

91

What is a stake holder

An individual or a group that has an interest in and is affected by the activities of the business

92

Examples of stakeholders

Manager
Workers
Customers
Competitors
Local community
Suppliers
Government