288058
Description
Flashcards by Emerson Dobbs, updated more than 1 year ago
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Created by Emerson Dobbs
about 11 years ago
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| Question | Answer |
| Primary Research | Primary Research is usually research planned and carried out by the individuals looking to use it. It is helpful when looking to find information specific to the business such as whether the price is too high or low compared to competitors. It can be very time consuming and therefore expensive |
| Secondary Research | Secondary Research involves researching information that has already been gathered. It can be in forms internal or external to the business. Internal research can include pricing information, sales records and employee surveys. External research includes internet and news reports. |
| Market Segmentation | Market Segmentation refers to the process of defining and subdividing a large market into clearly identifiable segments. E.g. the market segment of a small window cleaning business would most likely; live in the geographical location, be of similar age (old enough to own a house) and have a similar income (enough disposable to pay for window cleaning) |
| Market Share | Market share refers to the fees/sales earned by a business as a proportion of the total market for the same type of business/service. |
| Cash Flow | Cash flow refers to the cash the business receives for providing services or selling products, when it takes out a loan or owners invest cash in the business and so on, less the cash payments it makes to pay for expenses and stock, to repay liabilities or to purchase assets. |
| Internal cash sources of a business | Personal savings of the owner Personal loans from family. Mortgage over property Sale of other assets by owners. |
| External sources of cash | New partner Sale of shares to family Bank loans Bank overdraft |
| Sole Trader | A sole trader is a single owner of a business. The owner controls, manages and owns the business and is entitled to all profits. The owner can choose the hours of work and make all the decisions in the business. BUT... a sole trader is personally liable, if the business owes money and is unable to pay it, the owner but use his/her own assets. If the owner dies or retires, the business stops. |
| Partnership | Each partner: Shares responsibility for running the business so if one partner is unwell, or takes a holiday, the other partner(s) is able to supervise staff. Shares in any profits or loss equally, unless the partnership agreement states otherwise Contributes knowledge and experience. For example, one partner may bring marketing or accounting skills while the other has product knowledge and good relationships with staff. Contributes capital to the business, enabling the business to expand. BUT ... all owners are personally liable for the business' debts upon failure. Everything has to be agreed on by all partners. If one dies the partnership is dissolved. |
| Private limited liability company. | Owners in a company each have a ‘share’ of the ownership so they are called shareholders. Shareholders receive a share of profits called dividends. Shareholders may not necessarily work in the company. The company is run by the Board of Directors, which must act to protect the interests of shareholders. There is a separation between ownership and management. A company needs to be registered by applying to the Companies Registrar. This process takes some time and expense (legal fees). It is easy for a company to grow or expand by selling more shares. A private limited liability company sells shares to friends and family. It is not able to sell shares to members of the public because it is too small to be listed on the Stock Exchange. If a shareholder dies, his shares can be inherited or sold. The company continues to exist regardless of death or retirement of shareholders. However, the other shareholders all need to agree to allow shares to be sold. As more owners join the business the existing shareholders may start to lose control A company exists as a formal and legal entity in its own right. It is a separate legal entity – which means that the company is separate from its shareholder(s) or owner(s). Separate legal entity gives the shareholders limited liability |
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