business - business activity

3 purposes of business activity and enterprise

spotting an opportunity, developing an idea for a business, satisfying the needs of customers

4 characteristics of an entrepreneur

determination, creativity, risk-taking, confidence

3 risks of business

financial loss, business failure, lack of security

3 benefits of business

profit, independance, business success

3 ways to minimise risk

business plan, market research, sufficient capital

2 purposes of planning business activity

minimising risk, helping a business succeed

4 roles of a business plan

identifying markets, achieving aims and objectives, helping obtain finance, identifying recources a business needs

9 components of a business plan

business idea, aims and objectives, market research, revenue, cost and profit, cash flow, source of finance, location, marketing mix

limited liability meaning

business owners are only responsible for business debts as much as they have invested in the business. the owners and the business are seperate entities.

unlimited liability meaning

business owners personally responsible for all business debts. the owners and the business are the same entity

3 features of a sole trader

1 person owns the business, unlimited liability, pays income tax

3 features of a partnership

2 or more owners, deed of partnership, unlimited liability, pays income tax

what are the owners of a company called

shareholders

who runs a company

the ceo and board of directors

how are shares sold in a plc

publically on a stock market

how are shares sold in an ltd

privately and must be approved

3 advantages of a soletrader

quick and easy to set up, makes own decisions, keeps profit

3 disadvantages of a sole trader

unlimited liability, long hours, high resposibility

3 advantages of a partnership

quick and easy to set up, shared resposibility, shared decision making

4 disadvantages of a partnership

long hours, conflict, unlimited liability, one partner may not uphold responsibilities

3 advantages of a private limited company

limited liability, shares sold for money, selling of shares is monitored so less risk of takeover

3 disadvantages of a private limited company

more paperwork, financial information can be requested, time consuming to set up

2 advantages of a public limited company

money can be easily raised, lmited liability

2 disadvantages of a public limited company

expensive to set up, greater risk of takeover