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A LEVEL BUSINESS > Unit 1- what is a business > Flashcards

Unit 1- what is a business Flashcards

1
Q

what are goods

A

physical or tangible products

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2
Q

what is a service

A

non physical items

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3
Q

what is business to business

A

it is one business selling to another business

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4
Q

what is business to consumer

A

it is one business selling directly to its consumers

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5
Q

what is a business

A

an organisation that makes good or provides services to satisfy customer needs

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6
Q

what is the transformation process

A

any activity or group of activities that takes one or more inputs, transforms and adds value to them, provides outputs for customers

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7
Q

what is added value

A

is an amount added to the value of a product or service

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8
Q

what is the calculation for added value

A

difference between its cost and the amount received when it is sold

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9
Q

what are the four key inputs needed by businesses

A
  • land
  • labour
  • capital
  • enterprise
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10
Q

what does the primary sector do

A

extracts or develops natural resources

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11
Q

what does the secondary sector do

A

make use of extracted primary materials to build, manufacture or develop finished goods

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12
Q

what does the tertiary sector do

A

provides services needed to meet the needs of the end users

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13
Q

what is a mission statement

A

short statement of a businesses purpose and focus

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14
Q

what is an objective

A

a goal to help a business achieve its mission

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15
Q

what are corporate objectives

A

those that relate to the business as a whole

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16
Q

what are functional objectives

A

set for each business function/department

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17
Q

what is cash flow

A

the movement of money in and out of the business

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18
Q

what are business objectives

A

objectives are statements of specific outcomes that are to be achieved

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19
Q

what are fives examples of objectives

A
  • desired sales or profit levels
  • rates of growth
  • value of the business or dividends paid to shareholders
  • an innovative player in the market
  • a leading in the quality of customer service
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20
Q

what is the mission

A

is the overriding goal of the business and the reason for its existence.

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21
Q

what does the mission provide

A

a strategic perspective for the business and a vision for the future

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22
Q

what are the four things that make an effective mission statement

A
  • differentiates the business from the competitors
  • defines the markets or business in which the business wants to operate
  • is relevant to all major stakeholder
  • excites, inspires, motivates and guides
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23
Q

what is the acryonym that people believe the target should meet

A

SMART

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24
Q

what does the S stand for in SMART targets and what does it mean

A

Specific; the objective should be clear, precise and well defined

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25
what does the M stand for in SMART targets and what does it mean
measurable; an objective should be capable of measurement so that is possible to determine whether it has been achieved
26
what does the A stand for in SMART targets and what does it mean
achievable; the objective should be possible given the circumstances in which it is set and the resources available to the business
27
what does the R stand for in SMART targets and what does it mean
realistic; the objective must be challenging but possible to achieve given the capabilities of people
28
what does the T stand for in SMART targets and what does it mean
time bound; objectives should be set with a time frame in mind. these deadlines also need to be realistic
29
who would suit having the objective to survive
for a small business who is just starting out
30
what is profit
money left once costs have been paid
31
what is profit maximisation
try to make the most profit possible
32
when does short termism arise
when a business priorities short term rather long term performance
33
what is profit satisficing
try to make enough profit to keep the owners comfortable
34
what is growth
expanding the business
35
what is sales growth
where the business tries to make as many sales as possible
36
what is cash flow
having sufficient amount of money immediately available to pay day to day debts
37
what is ethical
beliefs on how one should treat the environment and those who are less fortunate
38
what is social
the service will need to meet the needs of the less well off in society or help improve the ability of the economy to function
39
what is the calculation for profit
revenue - total costs
40
what is revenue
money received from sales
41
what is the calculation for revenue
number of units x price per unit
42
what are variable costs
costs that vary with the level of output
43
what is the calculation for total variable costs
number of units x variable cost per unit
44
what are fixed costs
costs that do no vary with the level of output
45
what is the calculation for total costs
fixed costs + variable costs
46
what are three examples of fixed costs
- salary - rent - insurance
47
what are three examples of variable costs
- wage - raw materials - shipping
48
what is the private sector
made up of business owned by individuals or group of individuals
49
what is the public sector
made up of businesses owned by the government
50
what is a sole trader
is a business is not registered and owned by one person
51
what is a private limited company (ltd)
is a company owned by shareholders, the shares can only be brought privately
52
what is a public limited company
owned by shareholders, the shares can be bought on the stock exchange
53
what is social enterprise
businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community
54
what are mutuals
businesses that don't have shareholders or other owners. they are owned by members
55
what is a key feature of a sole trader
is an unincorporated business so the business is inseparable from the business owners. the owner is responsible for the debts
56
what are three advantages of a sole trader
- cheap to set up - gives the owner more freedom - owner takes all the profit
57
what are three disadvantages of a sole trader
- unlimited liability - limited capital - limited skills
58
what is a key feature of a private limited company (LTD)
it is registered with companies house and has a separate identity to the owners
59
what are three advantages of a private limited company (LTD)
- protection from debt - limited liability - access to more capital
60
what are three disadvantages of a private limited company (LTD)
- shares less attractive - less flexibility - more legal formality
61
why is a key feature of a public limited company (PLC)
it can be registered on a public stock exchange
62
what are three advantages of a public limited company (PLC)
- limited liability - easy to raise finance - gain public positivist
63
what are three disadvantages of a public limited company (PLC)
- everything is public - lots of administration expenses - greater scrutiny of activities
64
what are not for profit organisations
businesses with an objective other than profit. this may be to provide a social benefit or service to society or support a cause
65
what are 3 examples of a not for profit organisations include
- mutuals - charities - social enterprises
66
what is the definition of a shareholder
is a person who owns a share in a company
67
what is a share
is an individual part of the total issued share capital of a company
68
what is a dividend
is a payment from the profits made by a company to shareholders
69
what is capital growth
an increase in the value of shares
70
what does market capitalisation represent
the total market value of the issued share capital of the company
71
what is the market capitalisation formula
number of shares issues x price of a share
72
how does capital growth arise
an increase in the value of the business leading to an increase in the share price
73
what are 3 internal factors that will influence the price per share
- company performance - dividend policy - leadership reputation
74
what are 3 external factors that will influence the price per share
- global economic factors - competitive environment - scandals/ rumours
75
what is competition
is the rivalry between companies selling similar products and services with the goal of achieving the revenue, profit, and market share growth
76
what are interest rates
the cost of borrowing money
77
what are demographics
are the characteristics of the population
78
what is fair trade
way of trading with suppliers that offer better prices, decent working conditions and a fairer deal for farmers and workers in developing countries
79
what does the P is PESTLE(C) stand for
political
80
what does the E is PESTLE(C) stand for
economic
81
what does the S is PESTLE(C) stand for
social
82
what does the T is PESTLE(C) stand for
technological
83
what does the L is PESTLE(C) stand for
legal
84
what does the E is PESTLE(C) stand for
ethical
85
what does the C is PESTLE(C) stand for
competition

A LEVEL BUSINESS (5 decks)

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