Someone who is wiling to take the risks involved with starting a business as they believe the rewards are worth the risks and cost
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Why would someone want to start their own business?
To become their own boss, they need a job, to provide a service or product to benefit other people
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What is a social enterprise?
A business set up to help society rather than make a profit
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What is a gap in the market?
A business opportunity that is new or adds something different to the existing product/service
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What is a franchise?
The legal right to use the name and logo of an existing firm and sell the same products
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What are the benefits of buying a franchise?
Brand is already well established, franchisor will provide support and training, reduces risk of setting up a business.
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What are the disadvantages of buying a franchise?
If one franchise gains a bad reputation it will affect all the other franchisees, disputes over the balance of power between the franchisor and franchisee
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What is a business objective?
A clearly defined target a business aims to achieve
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What are some typical objectives for a business?
to survive, provide a good product, earn a profit, good customer satisfaction or being ethical
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What is the equation for market share?
sales of product/total market sales x 100
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What is the difference between public and private sector organisations?
Public are owned by the government and private are owned by individuals
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What are stakeholders?
Anyone that is affected by or affect the activities of a business e.g. employees, community and suppliers
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How do you work out the profit?
Profit = revenue - cost
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What is a business plan?
States what a business does at present and what it wants to
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What would be included in a business plan?
Information on founders, objectives, how it will compete, financial position
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What are some difficulties within business planning?
It's not easy to predict what will happen in the future market and those starting a business may lack experience so not have the skills to plan ahead well
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What is the meaning of unlimited liability?
When there is no limit to the amount of money owners may have to pay
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What is a sole trader?
Form of business owned and managed by one person
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What are some advantages of being a sole trader?
It's quick as you don't need to register with government, fast decision making and consultation isn't needed and you keep all profits
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What are some disadvantages of being a sole trader?
Unlimited liability, if sole trader dies business ends and it can be stressful to make all decisions
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What is a partnership?
When two or more people set up a business
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What is a deed of partnership?
A legal document that sets out the rules of the partnership, such as how profit will be divided and how decisions are made
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What are some advantage of a partnership?
More funds are available, less stressful, more skills to draw upon
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What are some disadvantages of a partnership?
Disputes, slower decision making, rewards are divided,unlimited liability
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What is a company?
A form of business that is created when a memorandum of association and articles of association are signed
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What is a private limited company?
A company that is owned by shareholders and can only sell shares privately not to the general public
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What are some advantages of private limited companies?
Limited liability, continues after death of founders, has a better status in customer eyes
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What are some disadvantages of private limited companies?
Have to register, must disclose information of sales and profits
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Why is location important?
It can affect the total costs, the amount of sales and the image given to the business
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What are the 8 factors that influence where a business locates?
Type of business, availability of location, competitors, availability of raw materials, availability/cost of labour, transport links,technology and costs
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Other cards in this set
Card 2
Front
Why would someone want to start their own business?
Back
To become their own boss, they need a job, to provide a service or product to benefit other people
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