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Question 1

primary activity

Answer 1

extract raw materials

Question 2

tertiary

Answer 2

services

Question 3

secondary activity

Answer 3

uses raw materials from primary and manufactures the product

Question 4

examples of primary activity

Answer 4

• mining
• farming
• fishing
  -extraction

Question 5

examples of secondary activity

Answer 5

• factories
• mills
• construction

Question 6

examples of tertiary activity

Answer 6

• retailers
• personal services
• business services

Question 7

what are the three sectors?

Answer 7

private
public
third

Question 8

private sector

Answer 8

owned by an individual

Question 9

public sector

Answer 9

owned by goverment

Question 10

third sector

Answer 10

charity

Question 11

examples of a private sector

Answer 11

• tesco plc
• manchaester united plc
• coca-cola enterprise ltd

Question 12

examples of a public sector

Answer 12

• NHS
• ofsted
• the british army

Question 13

examples of third sector

Answer 13

• the british red cross society
• cancer research
• living well CIC

Question 14

what are the forms of legal business ownership

Answer 14

-sole trader
-partnership
- private limited company
- public limited company
- state-govermenmt-owned organisation
- charity
- CIC

Question 15

sole trader

Answer 15

• one owner
• unlimited liability
• operates in the private sector
• full control of the business

Question 16

sole trader advantages and disadvantages

Answer 16

+be own boss
+ keep all profit
+ financial affairs are private
x unlimited liability
x skill shortage
x long hours

Question 17

partnership

Answer 17

• two or more owners
• unlimited liability
• owners have joint control of the business
  -operates in the private sector

Question 18

partnership advantages and disadvantages

Answer 18

+ financial affairs are private
+ workload shared
+ multiple skills
x split profit
x may disagree
x unlimited liability

Question 19

private limited comapny

Answer 19

• owned by one or more shareholders
• shares can be brought privately
• incorporated
• limited liability
• directors control the business
• operates in the private sector

Question 20

ltd advantages and disadvantages

Answer 20

+ can control who buys shares
+ separate legal identity
+ can raise funds by selling shares
x financial accounts not kept private
x dividends need to be paid to shareholders
x complex legal / administrative requirements

Question 21

public limited company

Answer 21

• owned by two or more shareholders
• shares are brought and sold on the stock exchange
• incorporated
• limited company
• directors control the company on behalf of the shareholders
• operates in the private sector

Question 22

plc advantages and disadvantages

Answer 22

+ limited liability
+ can raise large amounts of capital
+ business continues if shareholders dies
x loss of control
x higher set up costs
x more expectations to meet

Question 23

state-/government-owned organisation

Answer 23

• owned by the state and controlled by the gov
• public sector
• aims and objectives are set by government
• limited liability

Question 24

state/gov advantages and disadvantages

Answer 24

+ limited liability
+ no shareholders to please
+ not driven by the need to make a profit
x slow decision-making
x slow to change
x inflexible procedures

Question 25

registered charity

Answer 25

- makes revenue not profit - aim is to benefit a specific cause rather than make a profit - charitable status test - ran by trustees not owners - limited liability - third sector

Question 26

charity advantages and disadvantages

Answer 26

+ limited liability + wide range of funds available + direct control of business aims x complex legal requirements x relies on volunteers x financial accounts not private

Question 27

community interest company

Answer 27

- set up by private individuals - benefit society rather than making a profit - incorporated - third sector - limited liability

Question 28

CIC advantages and disadvantages

Answer 28

+ any profit made will be reinvested in the business + limited liability + wide range of funds available x must pay tax on income x financial accounts not private x complex legal / administrative requirements

Question 29

what are the factors that inform business ownership

Answer 29

- legal status - liability - funding - funding - control / decision-making - legal / administrative requirements

Question 30

legal status

Answer 30

- is the business a separate legal identity - being separate means the business can sue, and be sued, in its own right

Question 31

liability

Answer 31

- unlimited liability - personal possessions of the owners if the business goes into financial difficulty - incorporated businesses have limited liability

Question 32

funding

Answer 32

- public sector organisation may be financed by taxation - third sector organisation may receive grants and donations - private sector organisation is more likely to secure funds by borrowing or by taking additional owners

Question 33

legal/administrative requirements

Answer 33

- sole trader has very little paper work to set them up or to continue trading - plc has a great deal of paperwork

Question 34

business aims and objectives

Answer 34

- survival - financial aims - growth - reputation -being enterprising

Question 35

survival

Answer 35

- has to build up sales and a customer base - earn enough revenue to cover costs (break-even) - the business needs to survive

Question 36

financial aims

Answer 36

-break-even -increase revenue -reduce costs

Question 37

financial aims (break-even)

Answer 37

- cover costs - allow the business to survive without - making a profit

Question 38

financial aims (increase revenue)

Answer 38

- increase money brought back from sales - selling more at the same price - reducing price so more is sold

Question 39

financial aims (reduce costs)

Answer 39

- lower exenses involved in running the business - reducing electricity bill - finding cheaper supplier - paying lower rent

Question 40

financial aims (making a profit)

Answer 40

-increasing revenue or reducing costs - when costs are covered additionally revenue will be profit

Question 41

growth

Answer 41

- physically - opening a second branch, extending factory, employing more staff - increase market share - extend the range of products

Question 42

reputation

Answer 42

- quality / value for money, being ethical and having a social conscience - linked to personal ideals of the business owners - the right reputation will help a business to survive and make a profit

Question 43

being enterprising

Answer 43

- taking risks