business paper 1

give an example of changes in technology

new technological innovations such as fitness trackers

give an example in what consumers want

new trends

give an example for products and services becoming obsolete

better ways of doing things are discovered such as the tablet device to replace typewriters

identify some causes of business failure

failing to understand the market

give an example of failing to understand the market

underestimate degree of completion

give an example of poor planning

inadequate recourses

give an example of poor decision making

management inefficiency

give an example of a business being badly organised

poor stock control

give an example of business failure

being badly organised

what is overtrading

taking on too much work and gaining a bad reputation for poor quality and time management

what is a non- viable idea in the first place

ideas that are not researched appropriately and its only a matter of time before the business fails

what are some causes of business success

an ability to understand the market

give an example of having an ability to understand the market

experience

give an example of good planning

investment in appropriate rescources

give an example of good decision making

a strong business idea

give an example of being well organised

good stock control

give an example of financial efficiency

having a budget

why do businesses exist

produce goods, supplying services, distribute products, fulfil a business opportunity, provide a good or service to help others

tangible

touchable

give an example for adding value

convenience

what is a social enterprise

A business that is set up to help society rather than to make a profit.

what is a purpose of having objectives in business

to set tangents that businesses can work towards

what is the acronym for the purpose of having objectives in business

SMART

what does SMART stand for

Specific, Measurable, Attainable, Realistic, Time

Why do entrepreneurs start businesses?

it might be an interest of theirs

name a characteristic of an entrepreneur

leadership skills

name a role of an entrepreneur

growing a business

what is market research

The collection and analysis of data and information to inform a business about its market

what is customer needs

a need that motivates a customer to purchase a product or service

what are the four categories of customer needs

price, choice, quality, and convenience

why do businesses need to identify customer needs

to be competitive

why do businesses conduct market research

to identify market opportunities

what will market research involve

collecting information about demand, competition, and target market

what are methods of market research

primary and secondary

what is an advantage of face to face interviews

flexible questions

what is an disadvantage of face to face interviews

time- consuming

what is an advantage of telephone interviews

faster

what is a disadvantage of phone interviews

customers may not answer or could hang up

what is market segmentation

the process of dividing a market into relatively similar, and identifiable segments or groups

what is an example of the market?

location

what is market mapping

a visual representation of how a firm's products are positioned in a market

what does market mapping do

identifies possible gaps in the market, meaning customer needs are not being met

why do businesses use social media

to gain insights into markets and analyse trends

how do you calculate market share

Sales of business / total sales in market x 100

define demographics

type of and changing population

what is a competitors environment

factors that are outside the control of, but affect a business e.g pandemics

what is competition

the rivalry among businesses who operate in the same market

what is the market

a place where buyers and sellers come together

what is revenue

total sales

how do you calculate revenue

quantity sold × selling price

how do you calculate profit/loss

total revenue - total costs

how do you calculate total variable costs

variable cost per unit x quantity sold

what is revenue

income

what is loss

when the total costs of the business outweigh the total revenue

what is cash flow

The movement of money in and out of the business over a period of time

define insolvency

the inability to pay debts when they are due

define overdraft

a short term loan

why is cash important to a business

to pay suppliers

how do cash flow problems exist

when a business has a negative cash balance at the end of a period

what is a cash flow forecast

the process of predicting the future cash inflows and outflows

what does a cash flow forecast help a business to do

allows a business to identify any potential negative closing balances in advance and therefore take action

how do you calculate net cash flow

cash inflows - cash outflows

what is break even

a point where the total sales of a business equal total costs- no profit/loss

why is breakeven helpful

could help find out when the business could potentially make a profit

problem with breakeven

based on forecasts so could potentially be inaccurate

break even formula

fixed costs/(price-variable costs)

what is variable cost per unit

how much it costs for a business to create the product

what is the margin of safety

The difference between actual output and breakeven output

how do you calculate margin of safety

actual sales - break even sales

solutions to cash flow problems

change suppliers for cheaper

advantage to overdraft

only pay for money borrowed

disadvantage to overdraft

bank can call it in at any time

define trade credit

paying suppliers a period of time after the goods or services have been received

Define venture capital

an investment from an established business into another business in return for a percentage equity in business

Advantage of venture capital

expertise to help in business

disadvantage of venture capital

partial loss of ownership

define share capital

where the shareholder becomes part owner of the business

how are shareholders rewarded

by payment dividends

advantage to venture capital

improved cash flow

disadvantage to venture capital

interest must be paid regardless of financial performance

advantage to short term finance

you get a relatively small amount of money right away, and you pay it back quickly

disadvantage to short term finance

interest rate is very high

what is a business plan

A document that outlines how an entrepreneur is going to set up a new business

give an example of what should be in a business plan

aims and objectives

what is a problem to a business plan

problems arise if the plan is too rigid

what is legal structure in a business

the type of ownership that a business chooses

what is an example of legal structure

number of owners

define limited liability

the condition by which shareholders are legally responsible for the debts of a company only to the extent of the nominal value of their shares.

what is a sole trader

A business owned by one person

what is an advantage to being a sole trader

you keep all the profits

what is a disadvantage to being a sole trader

few specialist skills

what is a partnership

a business owned by two or more people

what is a franchise

a company that offers similar products or services in many locations

define franchisar

the business

define franchisee

sole trader/ partnership

advantage to franchise

can grow more quickly

disadvantage to franchise

franchisee will keep share of profit

what are the four factors that affect a business' choice of location

proximity to the: market, labour, materials, competitors

impact of internet

business' no longer need fixed premises

what is the marketing mix

Price, Product, Place, Promotion