Business Revision for NCE

What is a business oganisation?

A business organisation is an enterprise which provides good and services to consumers, usually wit the aim of making profits

Give the types of business organisation

• Sole trading

• Partnership

• Company

• Cooperatives

• Franchise

Define a company

A company is an incorporated business organisation owned by its sharehiolders

Define the Companies act

Companies Act is a legal document that outlines the rules and regulations of setting up a company

Define a Share

A share is a voucher that represents a unit of capital

Define shareholders

Shareholders are the one who invests in a company b buying its shares

What is a Share Certificate?

A share certificate is an official document that states the number of shares that shareholders have in the company

What is Dividend?

A dividend is the part of company's profits distributed among shareholders

Define Board of Directors

Board of Directors are those who have elected by shareholders to manage the company

Define Limited Liability

Limited liability means shareholders will lose only the initial amount invested in case the company goes bankrupt

Define Registrar of Companies

Registrar of Companies is the authority that registers companies and issues them a certificate incorporation to allow them to start its operation

Define Memorandum of Association

Memorandum of Association is a legal document that provides details such as the name of the company, names of shareholders and the distribution of shares

Define Articles of Association

Articles of Association is a document that specifies the internal rules of a company

Define Certificate Of Incoporation

Certificate Of Incorporation is a legal document that shows the official date that a company can start to operate

Define Annual Genereal Meeting

AGM is a yearly meeting where shareholders elect the directors of the company and the annual reprt about the performance of the bussines is presented and apporved

Give two types company

• Private Limited Company

Is a business that raises capital from a small number of shareholders such as friends, relatives or family

• Public Limited Company

Is a business that raises capital through issues of shares from members of the general public

Give the steps to set up a company

• Application to the registrar of companies

• Registration

• Certificate of Incorporation

Give the features of company

• Registration

• Ownership

• Control

• Risks

• Profits

Give the advantages and disadvantages of company

• Limited liability

• Seperate legal identity

• Continuity

• Capital

• Management

• Registration

• Disclosure of accounts

Define a cooperative

A cooperative is a business organisation owned and run joinlty by its members who share profits or benefits

Give the features of cooperatives

• Registration

• Ownership

• Control

• Profit

• Risk

Give the advantages and disadvantages of cooperatives

• Employment-create their own jobs and provide employments to other

• Ownership and control- shares ideas and help each other to manage the cooperative

• Profit

• Government surport- grants, loans and financial assistance

• Consultation

• Low profits

What is a franchise?

A franchise is an enterprise who bought a license fro a franchisor to sell its products

Give the features of franchise

• Ownership- franchise buys a license of operation

• Control- franchisee burns and control the enterprise

Give the adavantages and disadvantages of franchise

• Strong reputation

• Existing product

• Support and training- franchisor offers management support and training to personal

• Huge investment

• Control by the franchisor

• Profits to the franchisor

What is a multnational company?

A multinational company is an enterprise that has production or service facilities outside the country it is based

Give the factors affetimg choosing the right business oganisation

• Ownership and control

• Risks

• Expansion

• Registration and procedures

• Continuity

Define an entrepreneur

An entrepreneur is an individual who ets up an enterprise by taking risks and who aims to make profits

Give the functions of an entrepreneur

• Planning, choosimg the right business idea, setting objectives and anticipatin risks

• Leading, directing workers towards the objectives of the business

• Organising, bringing resources in the business to meet the objectives of thhe business

• Controlling, ensuring that tasks are being done according the expectations of the entrepreneur

• Staffing, hiring people

Give the reponsibilities of an entrepreneur

• Keep acounting records

• Recruit and train workers

• Promote the products

• Order raw mateials or goods for resale

• Handle customers

• Look after bthe finance of the business

Give the qualities of an entrepreneur

• Passionate, motivated and has strong drive to ake the business successful

• Intelligent. make the right desicions

• Innovative, come up with new ways of doing things

• Self confident, believe in his abilities

• Skill full, a nuumber of abilitie

• Risk taker, calculated risks

Define stakeholders

Stakeholders are people, groups or organisation who have interests in the activities and decisions taken by a business

Give the stakeholders their roles and objectives

• Owner, sets up the enterprise, maximise profits, expand

• Manager,

• Employers

• Suppliers, provides raw materials.

• COnsumers,

• Government, regulates and monitors enterprises,

• Community/society. Directly or indirectly influenced by the activies of an enterprise.

Give the types of risks

• Financial risk

• Operational risk

• Compliance risk

• Strategic risk

Give the 5 steps of risk management

• Identify the potential risk

• Assess the impact of loses

• Develop a plan to mitigate the risk

• Implement the plans

• REview and evaluate the plan

Define communication\

Communcation is the exchange and flow f information, feelings, thought and ideas from one person to another

Define the communication process

Communication process shows the flow of information from the sender to the receiver

Define effective ommunication

Effective communication is a two way process between the sender and the receiver, where a feedback is provided

GIve the causes of ineffective communication

• Language

• Medium

• Distraction

• Technical problens

GIve the importances of effective communication

• Order are placed in time

• Meet customers’ orders in time

• Employees know the job expectations

• Decisions are taken quicker

GIve the forms of communication

• Verbal

• Non verbal

• Written

• Visual

GIve the two types of communications

• Internal communication takes place among people withing the enterprise itself

• External communication occors when enterprises communicate with stakeholders outside the business

Define conflict

Conflict occurs when there is a disagreement or disapproval with another person or within a group

Give 3 reasons conflicts may arrise

• Disagreement on goal and objectives of the business

• Attitudes and Behavious

• The process of getting tasks done

Examples of conflicts?

• Allocation of works and responsibilities

• Ineffective communication

• Rivarly among staffs members

Give the ways to resolve conflicts

• Agree on the problem

• Show willingness to reseolve the issue

• Turn problems into opportunities

• Reach a win win situation

• Learn to manage emotions

• Improve communication skills

Define marketing and selling

• Marketing is the process of identifying and collecting data about customers’ needs and attempting to satisfy them

• Selling is concerned with exchanging products for cash

How to know your market?

• Targer market

• Pricing of product

• Customers; tastes and preferences

• Competitors

• Advertising Media

• Chanel of distribution

What is market research?

Market research is the process of collecting and analysing data about customers and market

GIve the importances of market reasearch

• Helps to identify the needs and wants of customers

• Allows the enterprise to quickly respond to changes in customers preferences

• Helps the business to plan its marleting activites

• Helps entrepreneur to launch new products with confidence

Give the 4 elements of marketing

• Product

• Price

• Promotion

• Place

Define product\

Product refers to the goods and services produced by an enterprise to satisfy the needs and wants of customers

Define Marketable product

A marketable product is a product which customers needs and will be ready to buy

GIve the factors making a product marketable

• Provides satisfaction

• Affordable

• Convinient to use and user friendly

• Attractive pacakging

• God labelling practices

Define price

Price refers to the amount of moeny paid bya customer when buying a good or services

GIve the factors affecting price

• Cost of production

• Ability to pay

• Price competition

GIve the pricing methods

• Penetration pricing, setting a low price to attract customers

• Premium pricing, setting a high price for a high quality product which is unqiue on the market

• Cost plus pricing, setting a price by adding up cost per unit to % of the profits

• Promotional pricing, reducing the price of a product for short period of time

• Competitive pricing, setting price to simila product on the market

Define promotion

Promotion is about communcating with customers so as to encourage them to buy the products of an enterprise

Give t three importance of promotion

• To raise awareness

• To increase sales

• To improve the image of the business

GIve the types of promotions

• Advertising, is about informing, persuading consumers of products by using media such as newspaper or radio

• Sales promotion, reducing the price of giving gifts to achieve a short term increase on sales

• Personal selling, entrepreneur making a face to face selling with the customer wih the aim of convincing him to buy the product

• Public relations, the use of free publicity through newspaper to improve the image of the buiness

• Direct marketing, involves making direct contact with customers

Define place

Place is about selecting an appropriate channel of distribution for products to reach customers

Define channel of distribution

Channel of distribution refers to the link a product passes through before reaching the customer.

GIve the factors affecting the place

• Nature of product

• The market

• Competition

Define E marketing

E marketing refers to the process of marketing a product using internet

GIve the methods of emarketing

• Web marketing is promoting a product using websites

• Email marketing is promoting the products through emails

• Social Media marketing is promoting a product through the use social media

GIve the importances of E-Marketing

• A large number of customers can be reached by electronic means

• Allow buying and selings at odd hours

• Business can communicate frequently with customers and provides the lastest informations

Define Business plan

A business plan is a document that contains a detailed plan to set up and develop an enterprise

Who are the users of a business plan?

• Banks

• Other stakeholders

• Potential investors

• Entrepreneur itself

Give the uses of a business plan

• Guide, business ideas are presented clearly, profits and losses can be predicted, losses can be avoided, the estimate costs and revenue are calculated, can attract potential investors

• Decision making tools, attract potential investors, can apply for bank loans

GIve the components of Business plan

• Information about the enterprise

• Human resources

• Operations, the unit of goods to be produces

• Marketing

• Finances, expenses, revenue, profits and losses