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49 Cards in this Set

  • Front
  • Back
Types of business aims and objectives
An aim or objective is a statement of what a business is trying to achieve over the next year.
Business Targets: Survival
Just surviving is the main and most important short term aim of all new businesses.
Business Targets: Profit
Most businesses will aim to make profit. This can take years for a new firm to achieve. Profitable firms are important for the economy because they create wealth creation.
Business Targets: Growth
Some firms aim to grow. could mean icreasing amount of employees, no. of products sold or income from sales.
Business Targets: Market Share
A business has not market share when it starts up. Needs to establish itself. This can be increased.
Purpose of setting business objectives
Helps staff to focus of shared aims. Different businesses have different objectives.
SMART Targets
All business objectives need to be SMART.
S=Specific. clearly state what is to be achieved e.g. increased profits.
M= Measurable. The desired outcome is a number value that can be measured. e.g. increase profits by 10%.
A=Agreed. All staff are involved in discussing and agreeing on an aim.
R=Realistic. The target is possible given the market conditions and the staff and financial resources available.
T=Timed. The target will be met within a period of time.
Internal Stakeholder
The people who work in the business. This means they are inside the business and involved daily (all kinds of employees).
External Stakeholder
These are people who don't work for the business and aren't involved in the day to day running. (Customers and local residents etc.)
Examples of internal stakeholders
Examples of external stakeholders
-Local community
Purpose of business plans
-Provides a sense of direction
-Helps to secure investment
-Predicts outcomes
-Measure performance
-Outline actions
-Define responsibilities
The goal of the firm
Skills of the management and workforce
Product or workforce
What the firm sells
The Market
Size of market; growth
How many other firms
Price, Product, Promotion, Place
Where sources of funding come from
Location and the resources required
Costs, Revenue and Profits
The potential for loss in a business however, some risks must be taken in order to yield a reward.
Not knowing what's going to happen in the future.
A person who isn't fearful of uncertainty and may even enjoy risky situations. He/she will take a chance or gamble in the hope of winning.
Unlimited liability
If the business goes bust owing a huge amount of money, you may have to sell everything you own to pay off your debts.
Sole Trader
A business that is owned and controlled by one person although they may employ workers e.g newsagents
Advantages of a sole trader
-Small and easy to set up
-Wage bill will be low because there are little or no employees
Disadvantages of a sole trader
-Work long hours
-Nobody to share responsibility with.
-Risk of unlimited liability.
Partnerships are businesses owned by two or more people. A contract call a deed of partnership is normally drawn up.
Advantages of Partnerships
-Less pressure on individuals
-There's someone to consult over business decisions.
Disadvantages of Partnerships
-Not as much power/may have to consult others before making decisions
-Disputes over decisions
-Like a sole trader, has unlimited reliability.
Private Limited Company (LTD)
A company that can't sell shares to the general public. It isn't listed in the stock exchange.
Advantages of LTD
-Protection of the name
-Ability to bring in partners by selling them shares.
-Alot less paperwork and regulation.
-Separate VAT status for the company.
Disadvantages of LTD
-Can't sell shares to the general public
-All profits are taxed.
-Contracts tend to be more formal.
- You will be fined if you miss filing deadlines.
Location: Availability of raw materials
Need to build a factory near materials they need to keep transport costs at a minimum.
Location: Transport
Build factory near transportation (lorry depot, train station) to keep transport costs to a minimum and also needs to be transport links to and from the factory for workers.
Location: Labour
Needs to be near a populated area and somewhere where the business has employee interest.
Location: Competition/other businesses
Only build near competitors if you have the power/skill/product/money to challenge them with.
Location: Technology
You need to have the availability for technology so work life can be easier.
Government and Location
The government offers grants and assistance to businesses that locate in areas with high unemployment.
To help with the cost of setting up a business. Grants don't have to be repaid.
Loans are repayable over many years at lower rates of interest than the bank.
Tax Breaks
Firms may be made exempt from paying business rates.