Studied by 2 peoplewhat are the 4 factors of production
Land, labour, capital, enterprise
land
land and buildings
labour
work done by employees
capital
investment and money required to start a business/ keep it going
enterprise
ability to identify business ideas and opportunities and take risks when appropriate
what are the three sectors of industry
primary, secondary, tertiary
primary
where raw materials are extracted
secondary
manufacturing
tertiary
providing a service
opportunity cost
what someone gives up in order to start a business
limited liability
the business owner or owners are only responsible for business debts up to the value of their financial investment in the business
unlimited liability
business owners' assets can be seized in order to pay for business debts
entrepreneur
an individual who is willing to take the risks by investing money into a business, organising resources and hoping to make a profit
footloose
a business that can be set up anywhere, e.g social media marketing company
sole trader
an individual who sets up their own business, has unlimited liability, full control and must be constantly working
partnership
when two more more people come together to own a business, have unlimited liability, share all profits and have increased investment from all sides yet may clash due to multiple ideas
deed of partnership
document all partners in a partnership sign outlining responsibilities, shares, profits etc
private limited company LTD
where a company privately sells its shares to increase investment, liability is limited and profits are shared through dividends, selling over 49% of the company may cause takeover
public limited company PLC
where a company sells its shares publicly on the stock market, has limited liability, stocks can be bought by competitors causing hostile takeover, share prices are controlled by the economy
non profit organisation
a company with limited liability who engages in business activities for causes that do not generate profits e,g charities, they are closely monitored by charity commissions
aim
general goal of a business
objective
small steps that get to the general aim of a business
stakeholders
group that directly affects or is affected by the activities of a business e.g employees, governments, banks, managers, pressure groups, suppliers
location
where a business bases its areas depending on factors
factors influencing business location
customer availability, employee availability, transport links for supplies, competitors, raw materials available, costs
business plan
document setting out business activities and future goals
6 sections of a business plan
business idea, target market, financial sources, costs+profits, aims+objectives, revenue forecast
fixed costs
costs that dont regularly fluctuate e.g rent
variable cost
costs that change regularly e.g more bread is needed as there is a higher demand
takeover
when one company buys another either through shares or buying the company outright
merge
two companies coming together tomake one
forwards vertical expansion
when a business merges with a business closer to the customer e.g manufacturers buying retailers
backwards vertical expansion
when a business merges with a business further away from the customer e.g retailers buying manufacturers
lateral expansion
buying a business in a completely different market e.g tata buying land rover and pg tips
outsourcing
paying a company to do a job for you
Note
Flashcard