1.4 - Ownership, Locations, Market Mix and Business plans

What is a Sole Trader?

a business which is owned and run by one person

T/F - A sole trader has unlimited Liability

true

Name three benefits of a sole trader

Easy to set up, Make your own decisions, Keep all the profits

Name 3 negatives of a sole trader

Unlimited liability, Work long hours, high level of responsibility

What is unlimited liability?

When the business’ and personal finances are not seperate

Why is unlimited liability bad?

If your business goes bankrupt your personal assets can be taken

What is a partnership?

A type of business that has two or more owners

T/F - A partnership has limited liability?

false

Name 3 advantages of a partnership

Quick and easy to set up, shared decision making, shared responsibility

Name 3 disadvantages of partneships

Conflict amongst owners can occur, unlimited liability, one partner may not hold their responsibilities

What is a Private limited company?

A company, with any amount of owners, that can sell shares to anyone they know

What does Ltd stand for?

Private limited company

Give 3 advantages of Ltd

limited liability, people can be their own boss, shares can be sold to raise money

Give 3 disadvantages of Ltd

more paperwork, people can see the businesses financial information, can be time consuming to set up

What is limited liability?

Where personal finances are business finances are seperate

What is a franchise?

A business that gives the right to another person to sell their goods using their name.

What is a franchisee?

a business that agrees to manufacture distribute or sell branded products under the license of a franchisor

What is a franchisor?

A business that gives franchisees the right to manufacture distribute or sell branded products in return for royal payment

What is royalty payment?

A fee that is payed by a franchisee to the franchisor which can be a sum of money or a percentage of profits

Name 3 advantages of a franchise

the franchisee gets access to free training and marketing, can be easier to make money, part of an established business

Name 3 disadvantages of a franchise

The franchisee has to pay a royalty payment, it can be expensive to set up, can not many business decisions

What is a competitive enviroment?

A market where there are other businesses producing the same or simular products or services

How many owners can a partnership have?

2-20

In a franchise, what is the name of the main business providing the rights to use its name and products?

Franchisor

What are owners also known as in a private limited company?

Shareholders

Name 3 things a business might consider when choosing where to set up

Proximity to labour, Proximity to materials, Proximity to competitors

What does proximity to labour mean?

How close you are to your workers and how easily accessible you are

Why is proximity to labour important?

Most companies will need to be in an area where workers will be willing to get to.

What does proximity to materials mean?

How close you are to raw materials that you may need

Why is proximity to materials important?

So that delivery costs of raw materials is not too expensive

What does proximity to competitors mean?

How close or far you are from competitors

Why is proximity to competitors important?

Some business may want to be close to competitors whilst others may want to be far away

What are the 4 Ps?

Product, Place, price and Promotion

what is market research?

When a business gathers data about customers and market trends

How can a product be successful?

By having a target market

How can a target market market help a product?

It will allow advertisement and the product to be directed at the people who are most likely to buy it.

How should a business set its price?

competition, customer opinions, brand image, availability and quality

What does place refer to?

Where the customer can purchase the product or service

name 3 places where a product can be purchased?

A wholesale store, an online website or app, directly from the manufacturer

What is promotion?

the methods a business uses to create interests in products or services

What is the main aim of promotion?

To persuade the customers to purchase or to inform about the product

Name 5 examples of promotion

TV adverts, influencers, billboards, branding, social media activity