LO1 (5)

What are the three main types of business activity?

Primary, Secondary, and Tertiary.

What is the aim of private sector businesses?

To make profit and grow.

What is a sole trader?

A business run by one person who has unlimited liability.

What are the advantages of being a sole trader?

Be your own boss, keep all profits, make all decisions.

What is a partnership?

A business run by 2 to 20 partners with unlimited liability.

What is a Private Limited Company (LTD)?

A company with limited liability, typically run by family and friends.

What must a Public Limited Company (PLC) have at least?

£50,000 share capital.

What is the main characteristic of the Third sector?

Businesses which do not aim to make a profit but are not government owned.

What are the four main financial aims of a business?

Break-even, increase revenue, reduce costs, make profit.

What does breakeven mean in business terms?

The point at which a business neither makes a profit nor a loss.

What type of costs do fixed costs represent?

Costs that do not vary with output, like rent and insurance.

How can a business increase its revenue?

By increasing/decreasing selling price, selling more products, or opening more stores.

What is growth in business terms?

It can be measured through physical expansion, increased market share, or increased provision.

What are the factors that inform business ownership?

Legal status, liability, funding, control/decision making, legal/admin requirements.

Why might a business aim to improve its reputation?

To be seen positively, produce high-quality goods, and potentially have a unique selling point (USP).