Business · Topic 1: Investigating small business

Making the business effective

The choices that help a small business succeed: how it is owned and whether to buy a franchise, where it is located, how its marketing mix fits together, and how a business plan reduces risk and helps raise finance.

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Key terms in this chapter

All 28, gathered from every lesson.

Unlimited liability
When the owner is personally responsible for all the business's debts.
Limited liability
When the owners can only lose the money they have invested in the business.
Sole trader
A business owned by one person, with unlimited liability.
Partnership
A business owned by two or more partners, usually with unlimited liability.
Private limited company (Ltd)
A business owned by shareholders, whose shares are not sold to the public, with limited liability.
Shareholder
An owner of part of a company.
Franchise
The right to run a business using another business's brand, products and methods.
Franchisor
The business that sells the right to use its brand.
Franchisee
The business that buys the right to trade under the franchisor's brand.
Royalty
A regular payment from franchisee to franchisor, usually a percentage of revenue.
Location
Where a business is based.
Proximity
How close something is.
Footfall
The number of people who walk past or into a business.
Labour
The workers a business employs.
E-commerce
Buying and selling goods and services online.
Fixed premises
A physical building a business operates from, such as a shop, office or factory.
Marketing mix
The four elements a business uses to market its product: product, price, promotion and place.
Product
The good or service a business sells.
Price
The amount customers pay for a product.
Promotion
How a business tells customers about its product and persuades them to buy.
Place
Where and how customers can buy a product.
Integrated marketing mix
A marketing mix in which the four Ps fit together and suit the same target market.
Digital communication
Promoting a business and talking to customers online, e.g. through social media, email and websites.
Business plan
A written document setting out what a new business will do and how it will do it.
Forecast
A prediction of future figures, such as sales, costs or cash flow.
Risk
The chance that something will go wrong, such as the business failing.
Finance
The money needed to start, run or grow a business.
Investor
A person or business that puts money into a business in return for a share of it.