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Business GCSE notes
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This is a page of in-depth business/ enterprise notes including key terms from a former GCSE AQA student
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BusinessKey words:
● A good - a physical product a company provides you with. (Coca-cola)
● A service - a intangible product a company provides. (window cleaning)
● Factors of production - things a business needs in order to provide their
goods or service. These are Land which is the physical space a business
needs or natural resources, Labour this is the staff and qualification a
business needs, Capital which is machinery and equipment and Enterprise
which is the entrepurneer or owner.
● Opportunity cost - this is something that is given up in order to do something
else.
● Primary sector - any bassic job that is natural and involves the process of
extracting of producing raw materials. (Fishing or mining)
● Secondary sector - this involves taking products from the primary sector and
making or manufacturing goods. (Hienz of BMW)
● Territorial sector - provides a service. (Hairdressers or restaurants)
● Unlimited liability - When the business owner or owners are personally
responsible for all the debt of the business, no matter what the value.
● Limited liability - when the business owner or owners are only responsible
for business debts up to the value of their financial investment in the business.
● A sole trader - this is a business that is owned and run by one person. They
may have a few employees but the business is only run by one person. Some
advantages include easy setup, keeping your profits and making your own
decisions. Disadvantages include high level of responsibility, works long hours
and risks of being an unlimited liability.
● A partnership - this is a business run and owned by 2-20 people. Some
advantages include there is shared decision-making by the owners,there is
shared responsibility for debt by the owners,partners bring more skills and
ideas and there is more capital available to invest. However, some
disadvantages include profits have to be shared between the partners,conflict
amongst owners can occur and risk of unlimited liability.
● Private limited companies (ltd) - can be a small or large company with a
limited liability. The owners of a private limited company are called
shareholders. Some advantages includes: the owners have limited liability, it
gives individuals the opportunity to be their own boss,any new shareholders
need to be invited which protects the business from outside influence and
shares in the business can be sold to raise money. Some dissadgantages
include: other people are able to view the business’ financial information,it can
be very time consuming to set up,the business may require outside
professional help to manage its finances.
● A public limited company (plc) - this is when a business grows, it sells
shares to the public on the stock market. Advantages include: the busines has
the ability to raise additional finance through share capital, the shareholders
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