gr.10 unit 1 business - business fundamentals

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Business

44 Terms

1

sole proprietorship

a business owned by one person

  • pros: easy to start and end, keep all profits

  • cons: unlimited liability, responsible for all debts

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2

partnership

Owned by 2 or more partners that share costs and responsibilities

  • General partnership: actively involved, mutual agency

  • Limited partnership: silent partner, investor, limited liability

  • Pros: shared responsibilities/ debts, greater financial resources

  • Cons: unlimited liability, mutual agency (you can be legally binded to your partner)

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3

Franchise

Licensing a businesses name, operating procedures, designs, etc to another person

  • Pros: training/help to set up given, good reputation

  • Con: expensive, decision making is limited

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4

Corporation

A business with 1 or more owners with limited liability and has been granted legal status. shares/stock may be owned by shareholders

  • Pros: limited liability, lower tax rate

  • Cons: value of shares may change due to external factors, complicated and costly to start up

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5

Co-operative

Owned and operated by its customers and workers, each person has an equal share/vote

  • Pros: shared costs/risks, equal control over business

  • Cons: mutual agency, majority rule over decision making

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6

what are the four business types?

retail, not for profit, service, manufacturing

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7

retail

Selling things for profit. Ex: walmart

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8

not for profit

Exists to meet the needs of the community. Ex: hobby groups, social groups

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9

service

Doing an activity for profit. Ex: massage spas

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10

manufacturing

making products out of raw materials to sell to retailers

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11

what are the three business categories?

non-profit, for profit, not for profit

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12

non-profit

  • Meant to help others, mainly government related. Ex: school, public healthcare, charities

  • Still make profit but its not their ultimate goal

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13

for profit

  • most businesses. ex: walmart

  • making money is the goal

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14

not for profit

  • still make money but that is not its purpose. ex: charities

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15

goods

a physically tangible item that is sold for profit

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16

services

an intangible thing that is sold for profit. ex: massage services

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17

profit

money left over after all business expenses are paid

profit = revenue - expenses

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18

consumer

the person that buys the goods/services offered by a company

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19

what is maslows hierarchy?

a theory developed to explain the motivations and behaviors of consumers

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20

unlimited liability

  • the law does not differentiate between the business and its owner so it is fully legally responsible for the businesses actions

  • if someone were to sue the business they can come after the owner and their assets

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21

limited liability

  • the business and its owners are legally separate

  • if a person were to sue the business they cannot go after the owners assets

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22

silent partner

they are not involved in running the business, they are mainly just investors. they have limited liability

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23

economics

the study of human decisions (production, distributions, consumption, etc) in using scarce resources to satisfy unlimited wants

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24

corporate social responsibility

How companies integrate social, environmental, and economic issues into their business in their transparent and accountable way

  • Compliance: acting to avoid repercussions

  • Conviction: acting because they want to make a positive impact

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25

what are the four drivers of CSR?

  • Economic responsibility - be profitable

  • Legal responsibility - obey the law

  • Ethical responsibility - do what's right

  • Discretionary responsibility - contribute to community

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26

ethics

external rules that help us differentiate between right and wrong

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27

morals

internal rules/opinions on what is right and wrong

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28

fraud

lying with the intent of person or financial gain. there are many types of fraud, ex: consumer fraud, businesses trick consumers into buying goods through unethical ads

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29

production process

  1. purchasing - buying raw materials needs to create the good/service

  2. processing - converting the raw materials into the product

  3. quality control - checking that all products are up to standard

  4. grading - giving the product a quality score

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30

parent company

a company that owns another company

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31

subsidiary

a company another company owns

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32

flagship store

a very important sore for the company typically has a high volume of customers and has the newest products

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33

production

when a person or business creates a product, service, or idea

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34

capital

  • money, assets, or investments (stock, buildings, machinery)

  • all businesses need this to run

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35

economic resources

  • the things that allow businesses to create goods/services

  • 3 types:

    • natural: materials that come from nature (oxygen, agriculture)

    • human resources: the people involved in the creation of goods/services (ex: nurses, construction workers)

    • capital resources: money, assets, investments (buildings, machinery)

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36

scarcity

  • the limited supply of something

  • the foundation of economic activity, there are a limited number of resources that need to meet unlimited wants

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37

opportunity cost

the benefit of doing one thing over another

  • ex: if you decide to do homework instead of watching TV the opportunity cost of homework is the lost enjoyment of watching TV

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38

command economy

all production and sales of goods and services is owned and ran by the government

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39

market economy

all production and sale of goods and services is determined by the producers and consumers

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40

mixed economy

having characteristics of both (canada is a mixed economy)

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41

law of demand

as price increases, demand decreases

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42

law of supply

as price increases, supply increases

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43

what are the six principles of CSR

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44

maslows levels

  1. physiological needs - water, food

  2. security needs - safety

  3. belongingness and love needs - family, community

  4. esteem needs - prestige

  5. self-actualization - reaching full potential in all areas of life

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