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Business Management IB

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Business sectors and activities

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Terms in this set (174)

Business sectors and activities

primary: natural resources
secondary: manufacturing
tertiary: services
quaternary: information

factors of production

land, labor, capital, enterprise

Reasons to start a business

autonomy: decision making
challenge: self-esteem
interest: passion
niche opportunities
inheritance
security: job, retirement
money

Starting a business

1. Business plan
2. Capital (savings, loans)
3. Business registration
4. Business bank account
5. Marketing

Problems a new business may face

finance: sources, assets, cash flow
marketing: mix, budget, customer base, rivals
HR: recruitment, skill, structure
Production: over/under, costs, no EoS

Elements of a business plan

Introduction: name, products, owner, goals
Product
Market
Finance
Personnel
Marketing

Sectoral change

shift in the relative share of national output and employment attributed to each business sector.

product worth more than input

take a financial risk by investing in an idea for own profit

develops products within a company for the firm's benefit

Sole trader advantages and disadvantages

1 owner + employees (?)
unincorporated
proprietorship
+: autonomy, tax benefits, easy set up, personalized service, decision making, take profit, privacy
-: unlimited liability, lack of continuity, face rivals, risks, stress, no EoS

Partnership advantages and disadvantages

2 - 20 owners
silent partners
deed of partnership
unincorporated
+: finance, specialization, productivity, privacy, easy set-up
-: conflict, slow decisions, lack of continuity, unlimited liability, share profit

shareholders, dividends
flotation, IPO, shares
board of directors
incorporated - protect investors
private limited: shares sold by agreement of BOD
public limited: shares to public
+: limited liability, finance, continuity, specialization, EoS, tax benefits
-: bureaucracy, loss of control, communication, no privacy, impersonal service, compliance costs

voluntary support
raise funds
marketing
+: society, trust, funds, tax benefits, unlimited liability
-: frauds, finance, bureaucracy, disincentive

owned by members
incorporated
voting rights
consumer coop/producer coop/worker coop
+: easy set-up, vote, decisions, society, help
-: disincentive, finance, slow decisions, motivation