A-Level Business Studies key content part 1

what is a sole trader

individual who starts and operates a business

most common form of business ownership in UK

can have employees though many don’t

advantages of being a sole trader

easy to set up and manage

make decisions quick

all profits for yourself

job satisfaction

disadvantages of being a sole trader

heavy workload

limited holiday

unlimited liability

what is unlimited liability

responsible for all of the business’s debt as there is NO LEGAL separation

what is a company

a business organisation that has its own legal identity with limited liability so shareholders aren’t at risk

what is a shareholder

an investor/owner of a company

what is incorporation

the process of creating a company with its own legal identity that gives you limited liability

what are dividends

a share of the profits distributed to shareholders

what are business’s

organisations which transform inputs into outputs or goods (tangible) or services (intangible)

what are some examples of inputs

-people

-finance

-equipment

what are some examples of outputs

-goods

-services

-waste products

why do business’s exist

to innovate and develop new products, employment and enhance a countries reputation

what are the 2 types of business’s

B2B and B2C

what is B2B

when a business sells directly to a business

what is B2C

when a business sells directly to its customers

what are the 4 types of sectors

primary

secondary

tertiary

quaternary

what is the primary sector

raw materials

what is the secondary sector

manufacturing

what is the tertiary sector

services

what is the quaternary sector

information services e.g. google and ai

what are objectives

statements of specific outcomes that need to be achieved

what do objectives do

provide direction and focus, motivate employees, hold staff accountable for their actions

what is the order of objectives in a business

mission

corporate

functional

unit/team

individual

what does mission mean

the overall business purpose

what does vision mean

overall aspiration of a business

what does aims/goals mean

general statements

what does objective mean

more precise and detailed statements for aims/goals

what do all business objectives need to be

SMART

what does the acronym SMART stand for

specific,measureble,achieveable,realisitc,timely

what are the most common business objectives

profit

survival

growth

social-giving back to society

ethical