Give two advantages and two disadvantages of being a sole trader.

It is quick and cheap to set up and the owner keeps all profit and control, but they have unlimited liability and can find it hard to raise finance.

Define limited liability.

The owner's loss is limited to the amount invested in the business, and personal assets cannot be taken to meet its debts.

What is a partnership?

A business owned by two or more partners who share the capital, the profits and, unless it is a limited liability partnership, the unlimited liability.

What is a deed of partnership, and why does it matter?

A written agreement setting out how profits, responsibilities and decisions are shared, which prevents disputes and provides for a partner leaving.

WJEC A-Level Business 601-5238-2

Enterprise and Starting a Business

Topic overview Enterprise and the entrepreneur Stakeholders in a business Business plans and sources of support Legal structures of business The public and private sectors Business location Sources of finance for a new business Business revenue, costs and profit

Markets and Market Research

Topic overview Types of market Market size, market share and market trends Market segmentation The degree of competition in a market Perfect competition and monopolistic competition Oligopoly and monopoly Consumer protection Demand and the demand curve Supply and the supply curve Market equilibrium and changes in price and quantity Price and income elasticity of demand Inferior, normal and luxury goods The value of market research Primary market research Secondary market research Qualitative and quantitative data Sampling and avoiding bias

Marketing

Topic overview Market orientation, product orientation and asset-led marketing The marketing mix Product and the product portfolio Branding, USP and differentiation The product life cycle Extension strategies The product life cycle and cash flow The Boston matrix Pricing strategies Choosing the right pricing strategy Promotion: above the line and below the line Place and distribution channels The marketing mix in different contexts and global marketing New technology in marketing

People in Business

Topic overview The flexible workforce New technology and changing working practices Workforce planning The recruitment process, job analysis and job descriptions Internal and external recruitment Methods of selection Training Appraisal Labour productivity, absenteeism and labour turnover Organisational design and structures Delegation, empowerment and delayering Motivation theories Financial and non-financial methods of motivation Management and management by objectives Leadership styles and theories Employment rights, duties and equal opportunities Trade unions, conflict and dispute resolution

Operations Management

Topic overview Added value Job, batch and flow production Choosing the right method of production Productivity Capacity utilisation New technology in operations Lean production and kaizen Just-in-time and cell production Quality control and quality assurance Total quality management Stock control and stock control diagrams Purchasing and working with suppliers Innovation, research and development Internal economies of scale External economies of scale Diseconomies of scale and the survival of small firms

Business Finance and Accounts

Topic overview Internal sources of finance Loans, overdrafts and trade credit Share capital and venture capital Leasing and debt factoring Choosing an appropriate source of finance Finance for entrepreneurs and SMEs in Wales Revenue, costs and profit Types of cost Contribution and break-even Break-even charts and the margin of safety Budgets and budgeting Cash flow forecasting Improving cash flow The income statement Gross and net profit margins

Business Analysis and Decision-Making

Strategy and Implementation

Topic overview Aims and objectives SMART objectives Mission and vision statements Corporate, divisional and functional strategy Strategy, tactics and corporate plans SWOT analysis Porter's Five Forces The Ansoff matrix Organic growth Mergers and takeovers Horizontal and vertical integration Franchising as a method of growth Location and relocation decisions Rationalisation and outsourcing production

Managing Change and Risk

Topic overview Internal and external causes of change Planned and unplanned change The effects of change on a business Managing change effectively Storey's four approaches to managing change Resistance to change Lewin's three step process Organisational culture and leadership in change Evaluating the management of change The risks a business faces Risk assessment and preventative action Insurable and uninsurable risks Contingency planning and crisis management

The External Environment

Topic overview Government and the framework for business The economic environment Social and demographic change Technology and business Business ethics and corporate social responsibility The legal environment Business and the environment

Global Business

Topic overview International trade and protectionism Globalisation and its causes Global growth strategies and multinationals The European Union and the euro

Enterprise and Starting a Business

Legal structures of business

3 things to know
AS Unit 1

Overview

Sole trader, unlimited liability and deed of partnership.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

Give one drawback of becoming a public limited company.

Key term

What is a sole trader?

Key term

Define unlimited liability.

Questions from this subtopic

Each one with the model answer underneath.

1
What is a sole trader?
Model answer
A business owned and controlled by one person, who receives all the profit and bears all the risk.
2
Give two advantages and two disadvantages of being a sole trader.
Model answer
It is quick and cheap to set up and the owner keeps all profit and control, but they have unlimited liability and can find it hard to raise finance.
3
Define unlimited liability.
Model answer
The owner is personally responsible for all the debts of the business, so personal assets can be taken to meet them.
4
Define limited liability.
Model answer
The owner's loss is limited to the amount invested in the business, and personal assets cannot be taken to meet its debts.
5
What is a partnership?
Model answer
A business owned by two or more partners who share the capital, the profits and, unless it is a limited liability partnership, the unlimited liability.
6
What is a deed of partnership, and why does it matter?
Model answer
A written agreement setting out how profits, responsibilities and decisions are shared, which prevents disputes and provides for a partner leaving.

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Enterprise and Starting a Business

Markets and Market Research

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People in Business

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