1 - Types of Businesses

Question 1

What does PLC stand for?

Answer 1

Public Limited Company

Question 2

What is an example of a state / Goverment owned businesses ?

Answer 2

The NHS
Public Schools
Prisons

Question 3

What is a Sole Trader ?

Answer 3

A business that is owned and run by a single individual

Question 4

What is an Ltd?

Answer 4

Private Limited Company

Question 5

What is the primary sector?

Answer 5

Primary sector produces the raw materials for industries e.g. Farm, coal mine and forestry.

Question 6

What is the secondary sector?

Answer 6

Secondary sector is the manufacturing and assembly process. This involves converting raw materials into components e.g. Building houses, bridges and roads.

Question 7

What is a Partnership ?

Answer 7

Two or more people trading together as an organisation

Question 8

What is an example of a Sole trader?

Answer 8

Fish & Chip shop
Window Cleaner
Mechanic
Electrician

Question 9

What is a business that is owned by one person who has employees ?

Answer 9

Sole Trader

Question 10

What is a business that is shared between two or more people ?

Answer 10

Partnership

Question 11

What is an example of a partnership ?

Answer 11

Warner Brothers
Ben and Jerry’s
etc.

Question 12

What is the tertiary sector?

Answer 12

Tertiary sector refers to commercial services that support the production and distribution process e.g. Transport, teaching and health care.

Question 13

What kind of liability does a PLC have?

Answer 13

Limited Liability

Question 14

What kind of liability does an Ltd have?

Answer 14

Limited Liability

Question 15

Give one key feature of an Ltd

Answer 15

Owned by Shareholders
Run by board of directors
Funded by retained profits and shares
Limited Liability
Invites people to purchase shares
Financial information is hidden from the public

Question 16

What is the aim of a charitable / no profitable organisation ?

Answer 16

To make as much profit so it can be givin to charities . It is mainly formed with volunteers , not getting paid.

Question 17

What is the goal of a community interest company ?

Answer 17

To improve the local community . It is a non profitable organisation.

Question 18

What is a business aim?

Answer 18

A summary of what the business wants to achieve in the future.

Question 19

Is there liability for a charitable , governmental and community interests organisation ?

Answer 19

N ⭕️ , there is no one owner to set liability on

Question 20

What is meant by the term ‘Recession’?

Answer 20

A period of economic decline where demand and output fall.

Question 21

What is the private sector?

Answer 21

The private sector is usually composed of organisations that are privately owned and not apart of the government. These include corporations and partnerships (profit and non-profit). Examples include retail stores (Tesco) and local businesses.

Question 22

What is meant by ‘economies of scale’?

Answer 22

Cost advantages gained when the size of a business increases. For example, suppliers may offer discounts to those placing larger orders.

Question 23

What is meant by the term ‘break-even’?

Answer 23

When a businesses outputs are equal to the amount of inputs. The business has made neither a loss or a profit.

Question 24

What is the public sector?

Answer 24

The public sector is usually composed of organisations owned and operated by the government. Examples of this can include the NHS and emergency services.

Question 25

What is the third sector?

Answer 25

Third sector organisations are owned and run voluntarily by trustees. These organisations are not run to make profit but to benefit the community. They operate with donations and gifts, any profits are reinvested. Examples include charity shops.

Question 26

What is the liability of a sole trader ?

Answer 26

A Sole trader has unlimited liability meaning they’re responsible for the debt of the company.

Question 27

What is the liability of a partnership ?

Answer 27

A partnership has unlimited liability.

Question 28

Give one key feature of a PLC

Answer 28

Can offer their shares to the public
At least two shareholders
Financial information available to the public

Question 29

What is a Unique Selling Point (USP)?

Answer 29

A specific factor that makes a business stand out from its competitors.

Question 30

How can a business build a good reputation?

Answer 30

Producing good quality products, providing excellent customer service and acting in an ethical and socially responsible manner.

Question 31

How can a business increase its revenue?

Answer 31

Introducing new products/services, expanding the number of stores or attract customers from competitors.

Question 32

Benefits of reducing costs?

Answer 32

Pass cost saving on to customers via lower prices, this will improve competitiveness and the ability to earn higher profits.

Question 33

Methods to increase profit margins

Answer 33

Reducing costs, increasing prices, prevent theft in stores

Question 34

Name 2 advantages of a Sole trader

Answer 34

• Sole traders are entirely responsible for their own decisions about the company.
• Sole Traders don’t have to split any profit.

Question 35

Name 2 disadvantages of a Sole trader

Answer 35

• Sole traders do not have another co-owner to discuss ideas and business opportunity’s with.
• A lack of finance may restrict the business

Question 36

Name 2 advantages of a partnership

Answer 36

• There is more capital available to contribute with more owners
• Partners may have different areas of expertise which will benefit the business

Question 37

Name 2 disadvantages of a Partnership

Answer 37

• All profits are shared

- If the partners disagree then arguments could affect the service of the business.