Business activity
Define ‘business’
Any organisation that brings resources together to produce a good or service to satisfy wants.
Define ‘primary sector’.
Businesses that use natural resources to produce raw materials used by other businesses
Define ‘takeover’
Takeover is when one company buys out all of the owners in another business
Define ‘partnership’
A business owned by two or more people who agree to share the risks and returns of the business
Define Profit
Profit is total income of a business (revenue) less total costs
Identify the 4 factors of production
Land, Labour, Capital and Enterprise
Identify two industries in the secondary sector.
anything
What is internal and external growth?
Internal growth occurs when a business expands its existing operations. External growth is when a business takes over or merges with another business. It is often called integration as one business is integrated into another one.
who are shareholders?
Shareholders are the owners of a limited company. They buy shares which represent partownership of the company.
The main internal and external stakeholder groups (7)
» owners » workers » managers » consumers » government » the whole community » banks.
what 2 factors lead to scarcity
unlimited wants and limited resources
Define De-industrialisation
when there is a decline in the importance of the secondary, manufacturing sector of industry in a country
2 adv and 2 disadv of being an entrepreneur
• independence • able to put own ideas into practice • may become famous and successful • may be profitable • able to make use of personal interests and skills • risk • capital • lack of knowledge • opportunity cost
whats a franchise?
Dividends are payments made to shareholders from the profits (after tax) of a company. They are the return to shareholders for investing in the company
what can be the objective of an owner
• share of the profits so that they gain a rate of return on the money put into the business • growth of the business so that the value of their investment increases
what are the 2 ways a business can increase added value
Increase selling price but keep the cost of materials the same.
Outline two reasons why the tertiary sector of industry is becoming more important in most economies.
As emerging/developing country economies expand and develop they become more efficient in manufacturing products. Secondary industries in the latter decline so that tertiary industries increase in relative importance.
4 ways businesses can be measures
» number of people employed » value of output » value of sales » value of capital employed.
adv and disadv of private limited company
adv :Raise capital from sale of shares-Limited liability for shareholders -Separate legal identity -Continuity
disdv:- Cannot sell shares to public- Legal formalities Accounts are available for public to see- Not easy to transfer shares
what could be the objectives of The whole community
jobs for the working population • production that does not damage the environment • safe products that are socially responsible
1 disadvantage and 2 advantage of division of labour
advantage : Workers are trained in one task and specialise in this – this increases efficiency and output • Less time is wasted moving from one workbench to another • Quicker and cheaper to train workers as fewer skills need to be taught
disadvantage:• Workers can become bored doing just one job – efficiency might fall • If one worker is absent and no one else can do the job, production might be stopped
Explain two possible reasons why some ministers want to privatise some businesses in the public sector.
. This raises finance for the government(taxes)
they might be managed more efficiently
Why governments support business start-ups
To reduce unemployment
To increase competition
To benefit society (for example, supporting disadvantaged groups in society)
to help grow further
what are dividents
Dividends are payments made to shareholders from the profits (after tax) of a company. They are the return to shareholders for investing in the company
Why could business objectives change
The owner now aims to work towards higher profit. 2 A business has achieved higher market share and now has the objective of earning higher returns for shareholders. 3 A profit-making business operates in a country facing a serious economic recession so now has the short-term objective of survival.