GCSE Edexcel Business: Start-up and Small Business Options

These flashcards cover key vocabulary and concepts related to start-up and small business options in the context of GCSE Edexcel Business.

Limited Liability

Owners and shareholders are only financially responsible for the amount they have invested in the business and cannot lose personal possessions.

Unlimited Liability

The business and the owner are considered one legal entity, meaning that the owner is personally responsible for all business debts.

Sole Trader

A type of business ownership where one individual owns and runs the business, retaining full control and responsibility.

Partnership

A business structure where two or more individuals share ownership and responsibility, each with unlimited liability.

Private Limited Company (Ltd)

A small to medium-sized business that has limited liability and can raise finance by selling shares privately, mainly to friends and family.

Franchise

An established business model where a franchisor sells the right to operate under its brand to a franchisee.

Advantages of Franchising

Franchising provides initial training, brand recognition, and marketing support, reducing risks for the franchisee.

Disadvantages of Franchising

Franchisees may have less control over their business operations and must pay royalties and follow the franchisor's marketing strategies.

Advantages of Sole Traders

Quick decision-making, full profit retention, and privacy of business information.

Disadvantages of Partnerships

Possibility of disagreements among partners, shared liability for debts, and requirement for a deed of partnership.

What is an advantage of partnerships?

One advantage of partnerships is the ability to pool resources and skills from multiple individuals, which can enhance business capabilities and lead to greater innovation.

What is a disadvantage of sole traders?

A significant disadvantage of sole traders is that they have unlimited liability, meaning their personal assets can be at risk if the business incurs debt or legal issues.