Buisness > 1.4 > Flashcards

1.4 Flashcards

(54 cards)

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1
Q

What is a sole trader?

A

A business owned and operated by one person with unlimited liability

The owner is personally responsible for all debts of the business.

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2
Q

What are the advantages of being a sole trader?

A
  • Full control
  • Keeps all the profit
  • Simple to set up
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3
Q

What are the disadvantages of being a sole trader?

A
  • Unlimited liability
  • Difficult to raise finance
  • All responsibilities lie with one person
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4
Q

Give an example of a sole trader.

A

A local baker, plumber, or online tutor

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5
Q

What is a partnership?

A

A business owned by 2 to 20 people who share responsibility and profit

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6
Q

What are the advantages of a partnership?

A
  • Shared responsibilities
  • More capital
  • Shared decision-making
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7
Q

What are the disadvantages of a partnership?

A
  • Disagreements can occur
  • Profits are shared
  • Unlimited liability
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8
Q

Give an example of a partnership.

A

A dental practice or law firm

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9
Q

What is a private limited company (Ltd)?

A

A business owned by shareholders who have limited liability

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10
Q

What are the advantages of a private limited company?

A
  • Limited liability
  • Easier to raise capital
  • Continuity if owners change
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11
Q

What are the disadvantages of a private limited company?

A
  • More complex to set up
  • Legal requirements
  • Accounts must be filed
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12
Q

Give an example of a private limited company.

A

A family-run furniture business or small tech company

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13
Q

What is a franchise?

A

A legal agreement where a franchisee buys the right to sell the products or services of an established business

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14
Q

What are the advantages of a franchise?

A
  • Established brand
  • Support and training provided
  • Easier to secure finance
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15
Q

What are the disadvantages of a franchise?

A
  • Start-up costs and ongoing fees
  • Limited independence
  • Must follow franchisor’s rules
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16
Q

Give an example of a franchise.

A

McDonald’s, Subway, Domino’s

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17
Q

What does proximity to market refer to?

A

Locating near customers to attract demand and improve convenience

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18
Q

Give an example of proximity to market.

A

Shops in high streets or shopping centres

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19
Q

What does proximity to raw materials mean?

A

Being near supplies to reduce transport costs and avoid delays

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20
Q

Give an example of proximity to raw materials.

A

A furniture manufacturer near forests for wood

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21
Q

What does proximity to labour entail?

A

Being near a skilled or affordable workforce

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22
Q

Give an example of proximity to labour.

Study These Flashcards
A

Tech companies near universities for access to graduates

23
Q

What is the importance of proximity to competitors?

Study These Flashcards
A

Attracting more customers, especially in retail

24
Q

Give an example of proximity to competitors.

Study These Flashcards
A

Fast food outlets in the same food court

25
What does proximity to customers highlight?
Important for service businesses to ensure easy access
26
Give an example of proximity to customers.
Hairdressers in residential areas
27
What does proximity to transport links involve?
Businesses needing to move goods may locate near roads, railways, ports, or airports
28
Give an example of proximity to transport links.
Warehouses near motorways
29
What is the significance of technology availability for businesses?
Access to good internet or digital infrastructure is essential
30
Give an example of technology availability.
Online businesses locating where there is reliable broadband
31
What factors influence the cost of premises?
Businesses choose affordable locations depending on their budgets
32
Give an example of cost of premises.
Start-ups avoiding expensive city centres
33
Why is availability of premises important?
Businesses must ensure appropriate premises are available
34
Give an example of availability of premises.
A factory needing large space may need industrial units
35
What is government support in terms of business location?
Some areas offer grants, tax breaks, or incentives to attract businesses
36
Give an example of government support.
Enterprise zones
37
What does the 'product' in the marketing mix refer to?
The good or service the business offers, including quality, features, branding, packaging, and design
38
Give an example of a product.
A phone with a long battery life and stylish packaging
39
What does 'price' in the marketing mix encompass?
The amount customers pay, including various pricing strategies
40
List some pricing strategies.
* Competitive pricing * Penetration pricing * Skimming * Cost-plus pricing * Psychological pricing
41
Give an example of price strategy.
A luxury brand using high prices to signal quality
42
What does 'promotion' in the marketing mix involve?
How a business communicates with customers, including advertising, discounts, sponsorships, and social media
43
Give an example of promotion.
A business using Instagram influencers to promote its new product
44
What does 'place' in the marketing mix refer to?
Where and how the product is sold, including physical stores, e-commerce, and delivery
45
Give an example of place.
Selling clothes online through a website and delivering by courier
46
Why is the marketing mix important?
All 4Ps must work together to meet customer needs
47
What is the impact of technology on price in the marketing mix?
Reduces costs, allowing competitive pricing
48
How has technology affected promotion in the marketing mix?
Social media allows targeted, low-cost advertising
49
What is the effect of technology on place in the marketing mix?
Online selling allows 24/7 global access
50
How does technology influence product in the marketing mix?
Enables customisation and innovation
51
What is the purpose of a business plan?
To set business objectives, secure finance, identify potential risks, support planning, make informed decisions, monitor progress
52
List the main sections of a business plan.
* Business idea * Aims and objectives * Target market and customer needs * Marketing and the 4Ps * Operations including location and suppliers * Finance needed and sources * Cash-flow forecast * Predicted revenue, costs, and profit * Staffing and management structure
53
What are the benefits of business planning?
* Helps reduce risk * Clarifies the business model * Makes it easier to secure finance * Provides focus and direction * Encourages research and realistic goals
54
What are the limitations of business planning?
* Plans may be based on inaccurate assumptions * Market conditions can change * Time-consuming to write and update * Cannot guarantee success * Some entrepreneurs may rely too heavily on the plan
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