Unit 1 - Understanding Business Flashcards
(54 cards)
What is a need?
A need is something that is essential for survival
What is a want?
A want is a luxury item that makes life more enjoyable
What is a good?
Goods are items that we can see and touch
What are types of goods?
Non durable goods - food
Durable goods - cars
Consumer goods - magazines
Capital goods - robot used to make car
What is a service?
Services are types of products that you can’t hold or touch e.g. public transport, hair cut, visit to the cinema
What are the four factors of production?
Land - natural resources of earth
Labour - human effort and skills needed to produce the product/service
Capital - the money needed to start up and run a business
Enterprise - the person who comes up with the idea and makes it happen
What are the sectors of industry?
Primary - extraction of raw materials
Secondary - the making of goods
Tertiary- services
What is customer service?
•Meeting customers needs and wants
•Being polite, honest and helpful
•After sales service, customers care line and product demonstrations
What are benefits of customer service?
•Customer loyalty - they are more likely to return
•Improved reputation- recommend the company to family and friends
What are the consequences of poor customer service?
•Decrease in profits
•Bad reputation
•Loss of market share
• Loss of competitiveness edge
•Low staff morale
How do you measure customer satisfaction?
•Ask customers opinions/interview customers
•Post a survey/questionnaire
•Set up a focus group
•Feedback form
How do you maximise customer satisfaction?
•Market research
•Staff training
•After sales service
•Customer complaints
•Quality products
What is an entrepreneur?
An entrepreneur is a person who develops starts and runs their own business
What skills do entrepreneurs need to have?
•Determination/leadership
•Communication skills
•Finance skills
•Organisation skills
•Decision making
What is a private sector business?
The private sector benefits private individuals (shareholders)
What are the private sector businesses aims?
•To make a profit
•To provide goods/services
•To grow
•Keep customers happy
•To survive agains competitors
What is a sole trader?
A one owner business
What is a partnership?
Is owned and controlled by 2-20 people
What are advantages and disadvantages of a sole trader?
Advantage - the owner keeps all profits
Disadvantage - long hours and many skills required
What are advantages and disadvantages of a partnership?
Advantage - work can be shared, partners can specialise in certain areas of the business, easy to take time off
Disadvantage - unlimited liability, may have arguments and disagreements
What is unlimited liability and limited liability?
Unlimited liability - being personally liable for all of your debts
Limited liability - you only lose what you have invested into the business
What is a private limited company?
The ownership of a limited company is decided up into equal parts called shares. Whoever owns one or more of these is called a shareholder. A limited company is private when its shares are not abating the public by being bought and sold on the stock exchange.
What are advantages and disadvantages of a private limited company?
Advantage - able to raise money by borrowing and through the shares issue of ordinary shares, limited liability
Disadvantages - must be registered with the register of companies, legal set up costs are expensive
What is the public sector?
Benefits the public (all of us) and not private individuals
