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58 Cards in this Set
- Front
- Back
- 3rd side (hint)
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State formula for added value |
Selling price - total cost |
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What is a public sector business |
Organizations that are owned by local/national government and profits are used in organization |
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What is a private sector business |
Businesses that are owned by private individuals that keep their profits |
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Name the advantages of private limited companies |
Money made by selling shares Firm is bigger Limited liability Death/illness doesn't affect business |
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Disadvantages to private limited companies are...
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No trading on stock exchange Expensive to set up Incorporates must be a separate legal company |
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What are the advantages of public limited companies: |
Advantages: Get more money by selling shares Firm is bigger Limited liability Specialist my be employed Shares may be given to workers for motivation |
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Name the disadvantages of public limited companies |
Disadvantages: Firm can be taken over Accounts not private Expensive to set-up |
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Stage 1 of the economic sectors are called.... |
Primary sector |
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Primary sector tries to... |
Survive and break-even |
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Primary sector |
It involves the extraction of earth's natural recources |
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Stage 2 of the economic sectors is also called |
Secondary sector |
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Name the function of the secondary sector |
Manufactures the resources from primary sector |
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Stage 3 is called the... |
Tertiary sector |
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Tertiary sector provides what? |
It provides services to consumers and other businesses |
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What does the tertiary stage try to do? |
Maximize profit and shareholder values as well as grow internationally |
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Secondary sector tries to... |
Grow and increase market share Increase consumer satisfaction |
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What are the factors of production? |
Land (natural resources) Labour (employees) Capital (machinery) Entrepreneurship (risk taker) |
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State definition of Opportunity cost |
The next best alternative foregone |
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What is specialisation? |
When a business has different people for different jobs, also called "division of labour" |
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Nonprofitable organisation |
Organizations that exist to serve a purpose not for making profit |
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Sole trader is what? |
Someone who runs their own business. Purely ownership lies in their control |
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Advantages of being a sole trader |
Cheap and easy to set up Owner keeps all profit Financial records remain private Only one to make decisions Motivation is high |
COFOM |
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Disadvantages of being a sole trader
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Limited capital for investment Little specialist skills Difficult to find cover when ill Unlimited liability |
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Ways to add value: |
Good services Guarantees Packaging Brand image |
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Chain of production includes... |
All economic sectors. Tertiary sector, primary sector and secondary sector |
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What are the types of business objectives? |
Survival_ making sure business organisation is active in future and does not go bust Profit_ a reward to owners of business organizations for being risk takers Expand_ increase market share, have greater production capacity, have more retail outlets Diversity Providing a service |
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What are the location factors? |
proximity to market Availability of raw materials Labour Competition & Costs |
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Opportunity cost is what? |
Defined as the next best alternative forgone |
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Variable costs is... |
Cost that change in proportion to companies output (Raw materials, packaging, transportation costs, overtime payments) |
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What are fixed costs? |
The cost that remain constant regardless of business out put (Such as rent, advertising, manager's salary and vehicle insurance) |
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Define the Division of labour |
When a business has different people for different jobs |
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Name the advantages for using Division of labour |
Workers trained in short amount of time Less time is wasted during !manufacturing Quicker and cheaper |
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What are the disadvantages for using division of labour |
Boredom Production may be slowed bc. of absent worker |
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Define the term added value |
How much a business sells a product for than the total cost of materials |
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What is a stakeholder? |
a group of people who have interest in a business because it effects them |
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What type of sectors does a MIXED ECONOMY have? |
Private sector And a public sector |
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Define Public sector |
A business not owned by government. It makes its own decisions about production and how it should be produced as well as what price to be charged for |
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Define private sector |
Owned by government Government has control and makes decisions. Some goods and services are free bc. money is gathered of taxpayers bc. money is gathered of taxpayers . money is gathered of taxpayers |
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Privatisation happens when... |
Public sector business is sold to private sector business |
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Capital can also be... |
The money invested into a business by the owners |
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Entrepreneur is what? |
Someone who takes the risk of setting up their own business |
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Characteristics of successful entrepreneurs |
Hard working Creative Optimistic Independent Innovative Risk taker Self confident Effective communicator |
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Contents of a business plan: |
1 description of buss. 2 products and services 3 the market 4 business location 5 organization structure and management 6 financial info 7 business strategy |
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Business can grow through... |
Expanding existing operation diversification Merging with other businesses |
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Reasons for business failure: |
Lack of management skills Changes is business environment Poor financial management Over expansion |
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Profit is... |
Total money you made from a product after selling it |
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Calculating profit and loss |
Revenue - expenses |
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What are Expenses? |
The money spent on things for business to keep on selling or !manufacturing products |
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Revenue means |
The total amount of money a business has generated over a set period of time |
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Calculating total cost |
Total fixed cost + total variable cost |
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Calculating revenue |
Selling price x quantity of units sold |
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Aims and objectives should be |
Specific Measurable Achievable Realistic Timebound |
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Calculate market share % |
Company sales ÷ total market sales x100 |
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Insure job satisfaction |
Job rotation, enlargement, enrichment Team working Opportunity for training and promotion |
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Financial motivators |
Wages often paid in time rate or piece rate Salary Commission Bonus Performance related pay Profit sharing Share of ownership |
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Nonfinancial motivators |
Company vehicle/car Free health care Children's education fees paid for Free accommodation/trips/holidays Discount on firms products |
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Manager roles |
Planning Co ordinating Organizing Commanding Controlling |
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When does de-industrialisation occur? |
Occurs when there is a decline in manufacturing sector |
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