business edexcel a level > 1.5 > Flashcards

1.5 Flashcards

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1
Q

what are objectives

A

quantifiable targets or goals to be achieved within a given period

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2
Q

what are the business objectives?

A

-Survival
-Profit maximisation
-Sales maximisation
-Market share
-Cost efficiency
-Employee welfare
-Customer satisfaction
-Social

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3
Q

What is a mission statement?

A

brief written statement of the purpose of an organisation

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4
Q

what is the order of targets/ objectives

A

-Mission statement
-Aim
-Objectives
-Strategy
-Tactics

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5
Q

what is the acronym for setting objectives?

A

Specific
Measurable
Achievable
Realistic
Timely

SMART

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6
Q

why do businesses set objectives?

A

-Common sense of purpose
-Motivate employee
-Create reward system
-Measure performance
-Informed decision decisions

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7
Q

what characteristics to make a good entrepreneur

A

-Hard-working
-Risk taker
-Motivated
-Innovative
-Opportunities spotter

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8
Q

what skills are needed to be an entrepreneur?

A

-Good communication
-Organised
-Literacy
-Numeracy
-IT
-problem-solving
-Teamwork

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9
Q

what are the financial motives of setting up a business?

A
  • profit maximisation
    -Profit satisficing
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10
Q

what is profit maximisation?

A

To make as much profit as possible

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11
Q

what is profit satisficing

A

To make enough profit to be satisfied, but not purely motivated by it

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12
Q

what are the non-financial motives of setting up a business?

A

-Ethical stance
-Social entrepreneurship
-Independence
-Homework

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13
Q

What is an entrepreneur?

A

A person who’s bought an opportunity and takes risks in order to benefit from potential rewards

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14
Q

what are the roles of an entrepreneur?

A

-Creating and setting up a business
-Running an expanding of business
-Innovation within a business
-Barriers to entrepreneurship
-Anticipating risk and uncertainty

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15
Q

what is involved in creating and setting up a business?

A

-Generating idea
-Adding value
-Market research
-Business plan
-legal structure
-Racing finance

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16
Q

what does a business plan include?

A

-Executive summary
-Products or service
-Market
-Marketing strategy
-skills of key employees
-operations
-financial forecasts

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17
Q

what is the purpose of a business plan?

A

-Secure external funding
-Identify problem areas
-Set targets
-Provide expectations

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18
Q

what does running and expanding a business include?

A

-Managing resources
-Marketing decision decisions
-Dealing with customers
-Maintaining finance

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19
Q

what might an entrepreneur need to change as the business grows?

A

-Employ staff
-use experts
-delegate
-move to bigger premises
-change suppliers
-expand product range

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20
Q

what is an intrapreneur?

A

Someone with entrepreneurial skills who uses them within a business rather than to launch a new one

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21
Q

what are the barriers to entrepreneurship?

A

-Lack of finance
-Lack of knowledge
-Risk averse
-Lack confidence
-Limited skills
-lack idea

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22
Q

what is risk?

A

A measurable degree of uncertainty

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23
Q

what is uncertainty

A

a non measurable degree of uncertainty

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24
Q

how can risk be anticipated?

A

-Market research
-business plan
-assess potential losses

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25
how can uncertainty be anticipated?
-be informed about business climate -make plans for unexpected events -spread risk
26
what are the risks of being an entrepreneur?
-financial: money invested -esteem: business failure -commitment: time and effort
27
what are the rewards of entrepreneurship?
-Profit -independence -salt actualisation: achievement/ self satisfaction
28
what is an opportunity cost?
The benefit loss of the next best alternative when making a decision
29
what is a trade-off?
All the possible alternatives given up when making a decision
30
what characteristics do good leaders need?
-Emotional intelligence -Interpersonal skills
31
what is emotional intelligence?
-Recognising the impact of our own emotions on our feelings and actions when considering other peoples emotions when consider considering them -the ability to empathise
32
why might an entrepreneur struggle to become a leader?
-Reluctance to handover control/ delegate -loss of autonomy this decision-making -Learning to trust other others
33
what are the benefits of delegation?
-Load sharing; reduced stress -Job satisfaction/motivation -Specialisation -Flexibility -Progression for promotion
34
what is verification?
-Reviewing inspecting and testing to check performance levels -Constant verification may be seen as lack of trust
35
what is validation?
-Recognition for work -Often part of an appraisal (checking employees progression in a role)
36
what is a sole trader?
-An individual who owns and runs their own business -Unlimited liability
37
pros of a sole trader
-Cheap and easy to set up -Keep all profits -Make own decisions -Private financial records -High motivation
38
cons of sole trader
- limited capital for investment -one/few skills -difficult to find cover
39
what is a partnership?
Where 2 –20 people share the costs, risk and responsibilities of being in a business together
40
what is each partner in a partnership responsible for?
-debts -profit -decision making -management
41
what is a sleeping partner?
A partner who invest is in a business but does not manage it
42
pros of a partnership
-shared risks, costs and responsibilities -more specialist skills -simple and flexible -more capital can be raised
43
cons of a partnership
-potential arguments -trust important -split profits
44
what is a limited company
-A company that exists in its own right, legally separate to owners -has limited liability
45
what is a private Limited company?
owned by shareholders who are known to the company, eg friends and family
46
how does a business become LTD
—become incorporated through companies house -create memorandum and articles of association
47
pros of LTD
-can remain family run -limited liability -capital raised via sale of shares
48
cons of LTD
-more complex to set up -some loss of control to shareholders -more limited in capital than PLC -
49
what is a PLC/ public Limited company?
A business that sells shares to the public via a stock exchange
50
what is the initial public offering IPO
-The act of offering stock of the company on a public stock exchange for the first time
51
pros of PLC
-appear more credible -limited liability -high capital can be raised
52
cons of PLC
-lack of privacy -complex to set up -loss of control to shareholders -risk of hostile takeover
53
what is unlimited liability?
-The owner is personally liable for the firms debts and may have to pay out of their own pocket
54
what is limited liability?
-Owners are not personally liable for the firms debts
55
what is a franchise?
A business is licensed to trade using the brand/model of an existing firm in return for a fee/royalty
56
what are benefits to the franchisor of franchising?
-rapid expansion -motivated staff (high set up cost) -econ of scale
57
whatre thr cons of franchising to the franchisor
-loss of control -can be expensive/time consuming to oversee/ train -difficult to manage growth
58
whatre the pros to the franchisee
-lower risk -established product -experiences firm -brand awareness -assistance, advice, training, marketing etc
59
whatre thr cons to the franchisee
-lack of autonomy -high initial cost -less chance for creativity -never fully own business -pay royalties
60
what is a lifestyle business?
-A business to support the owners personal requirements or interests rather than maximising revenue -Maintain worklife balance
61
what is a social enterprise?
A business dedicated to social or environmental objectives, any profit is reinvested to the objective
62
what is an online business?
A business that trades in a virtual marketplace using e-commerce and technology
63
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