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63 Cards in this Set
- Front
- Back
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Name the 4 factors of production (CELL) |
capital entrepreneur labour land |
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what is opportunity cost |
Benefit of the next most desired option which is given up |
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What is consumer goods |
physical and tangible goods sold to the general public |
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what is consumer services |
non-tangible products sold to the general public |
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what is capital goods |
physical goods that are used by industry to aid in production of other goods and services |
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Describe an entrepreneur (SCRIML) |
Self-confident Committed Risk taking Innovated Multi-tasked Leadership |
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Why do businees often fail? (LLPC) |
Lack of record keeping Lack of cash and working capital Poor management skills Changes in the environment |
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Impact of enterprise on the economy (EEEIIP) |
Economy growth Employment Exports Increase in social cohesion Innovation Personal development |
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What is creating value |
The increasing difference between cost of purchased bought-in materials and price finished goods are sold for |
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what is adding value |
Difference between cost of purchasing bought in materials and the cost goods are sold for Not profit |
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Major challenges faced by entrepreneurs (B.DISC) |
Building up a customer base Determining a location Identifying successful business opportunities Sourcing capital competition |
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what is public sector |
controlled by central or local government |
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what is private sector |
controlled by individuals or group of individuals |
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what is mixed economy |
economic resources are owned by private and public sectors |
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what is free- market economy |
economic resources are owned by private sector and a little of the state |
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what is command economy |
economic resources are owned by the state |
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what is a sole trader |
ONE PERSON produces the permanent finance and has full control of the business and is able to keep all profits |
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what is a partnership |
business formed by TWO OR MORE individuals to carry on a business together, shares capital investment and responsibility |
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what is a share |
a certificate confiriming part ownership of a company and entitling shareholder owner to dividends and certain shareholder rights |
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what is a shareholder |
a person or institution owning shares in a limited company |
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what is a limited liability |
the only liability- or potential loss- a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholder |
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what is a private limited company |
the company cannot sell shares to the public, only to family members and friends |
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what is a public limited company |
a limited company, a large business, with the legal right to sell shares to the general public. |
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what is uncooperative |
sole trader no money protection, one person in charge |
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what is continuity |
another voted shareholder will take over when the main director of company dies |
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what is a franchise |
entrepreneur that doesnt make their own idea, they take a franchise from another company. A business that uses the name, logo and trading systems of an existing successful business. |
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what is a franchisor |
providing to their services to another business |
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what is a franchisee |
person taking on the franchise , take responsibility to advertise |
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what is a joint venture |
two or more business agree to work closely together on a particular project and create a separate business division to do so. Bring different skills together, most successful may want to take over the small, benefit of both companies. At the end they will split. |
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what is cooperatives |
Making small business bigger, working together and everyone has the same vote, way of ensuring earning money from resources.
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what is holding companies |
company in its own right, own and controls a number of separate businesses, but doesn't unify with them in the company |
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What are the two legal formalities in setting up a business |
memorandum of association articles of association |
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what is memorandum of association |
this states the name of the company, address of HQ, maximum of share capital, aims of the business |
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what is article of association |
document that covers internal workings and control of the business, the names of directors and procedures to be followed at meetings will be detailed |
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what is a public corporation |
A business enterprise owned and controlled by the state |
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What are the different measures of size (ERCMM) |
Employees (number) Revenue Capital employed Market capitalisation Market share |
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What is revenue |
the total value of sales made by a business in a given time period |
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what is capital employed |
the total value of all long term finance invested in the business |
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what is market capitalisation |
the total value of a companys issued shares |
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what is market share |
sales of the business as a proportion of the total market shares |
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what is the formula for market capitalisaiton |
market capitalisaton= current share price x total number of shares issues |
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what is the formula for market share |
(total shares of business/ total shares of industry) x 100 |
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what are the benefits of small businesses |
Many jobs created Often run by dynamic entrepreneurs Create competition for larger businesses Supply specialist goods and services to important industries in a country Small firms are encouraged to get bigger and expand Small firms may enjoy lower average costs than larger ones do, could be passed onto consumer too |
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How does the government help small firms |
Reduced rate of profits of tax Loan guarantee scheme Information, advice and support Some countries, supplied with workshops which are rented to small firms |
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Advantages of small businesses |
Managed and controlled adapt quickly to meet changing consumer needs Offer personal service Easier to know each worker Good motivation |
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Advantages of large businesses |
afford to employ specialist professional managers benefit from cost reductions set low prices different sources of finance diversified in several markets, risks are spread afford research and development |
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disadvantage of small businesses |
limited to access of sources of finance lots or responsibility risks of negative impact of external change few opportunities |
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disadvantage of large businesses |
difficult to manage may have potential cost increases associated with large-scale production suffer from slow decision-making and poor communication divorce between ownership and control |
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Why do directors of companies seek growth for their business? Increase,increase, increase |
Increase profits Increase market share Increase economies of scale |
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Strengths of a family business |
Commitment Reliability and pride Knowledge continuity |
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Weaknesses of a family business |
Succession/ continuity problem informality traditional conflict |
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What is internal growth |
expansion of a business by means of operation new branches, shops or factories Growth inside the business |
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What is the triple bottom line |
the three objectives of social entreprises: ECONOMIC, SOCIAL and ENVIRONMENTAL |
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What is the 'SMART' business objectives |
S- specific: M- measurable A- Achievable R- Realistic and relevant T- time-specific |
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what is a mission statement |
statement of a businesses core aims, phrased in a way to motivate employees and to stimulate interest by outside groups |
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what does profit maximisation mean? |
producing at that level of output where the greatest positive difference between total revenue and total costs is achieved |
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Name the pyramid of objectives |
Aim Mission Corporate objectives Strategy Tactics |
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what is the cost of a business |
What the business spends |
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what is a price of a business |
the amount that products are sold for |
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what are the four objective departments of a business |
Human resources Finance Marketing Operations |
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what is economy of scale |
buy in bulk, eg latest technology, making savings |
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what does CSR stand for |
Corperate social responsibility
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what is CSR ? |
not thinking about money but the community, environment and the world. Be in touch with the consumers, be responsible. |
