Flashcards in Topic 1 Deck (18)
Definition of enterprise.
To spot an opportunity to start a business that people are willing to buy.
Definition of entrepreneur.
Someone who develops a business idea who puts it into practise.
A plan in business to achieve an objective without the business going a drift.
Advantages of a business plan.
- helps you guide through your first year of business.
- controls finances.
- helps applying for a bank load.
- achieve objectives.
Disadvantage of a business plan.
- may be poor quality due to lack of experience.
- it will need to be constantly updated due to change in circumstances.
- takes time and effort.
- new opportunity’s may be missed.
Advantages of sole trader.
- decide own working hours.
- you get all profits.
- no boss
- get all credit
- you make all key decisions.
Disadvantages of sole trader.
- no advice of other people.
- no guaranteed work or money.
- lots of pressure and responsibilities.
- unlimited liability.
Advantages of partnership.
- share setup costs.
- share work ‘n’ stress.
- more input into business as there are more points of view.
- more contacts.
Disadvantages of partnerships.
- they could disagree with a decision in the business.
- have to share profits.
- could have a unreliable partner.
A deed of partnership.
Lays out the rules for running a partnership business E.G.
- how profits are split.
- working week.
- if one wants to lose.
- who invested what.
A sleeping partner.
Someone who invests money into the business for a cut of the profits who has no part in the day to day running.
Public limited company. Base info.
-PLC after name.
- shareholders from the public.
- run by managing directors.
Public limited company. Advantages,
- good art raising capital.
- good at growth and expansion.
- big profile.
- widens shareholder base.
Public limited company’s, disadvantages.
- lack of ownership and control.
- vulnerable for takeovers.
- expensive to set up.
Private limited companies.
- LTD after name.
- owners called shareholders.
- usually owned bay families or friends.
- governed by two legal documents.
Anyone who takes interest in the business or who the business effects.
Any stakeholder inside the business.E.G