Business in the real world
What's covered
Key facts
Moving to e-commerce with home delivery lets a business reach customers nationally without paying for town-centre premises in every city.
A cooperative is a business owned and run by its members for their shared benefit (e.g. the Co-op, John Lewis Partnership employee model). Members typically have an equal vote regardless of investment.
A business plan is a written document setting out a new or existing business's aims, the market it serves, its operations, and its financial forecasts.
Acquiring an existing local business gives the fastest access to a new geographic market — the buyer inherits premises, staff, customers and brand recognition in one step.
A business aim describes a broad goal ("become the UK's leading online clothing retailer"); an objective is a measurable, time-bound target that supports the aim.
One way to balance conflicting demands from shareholders and employees is to link a share of profits to performance-based pay — staff share in rising profits, shareholders accept a smaller dividend.
The main commercial purpose of most private-sector businesses is to make a profit through trading goods or services — revenue must exceed costs over time.
The Big Issue is a well-known UK social enterprise — it sells a magazine through vendors who keep most of the cover price, helping them earn a legitimate income.
An e-commerce business sells through a website (and/or app) rather than from physical premises, removing many traditional location constraints.
Franchisees normally pay an initial up-front fee plus ongoing royalty payments (usually a % of revenue) to the franchisor for continued use of the brand and support.
Sample questions
A taste of the 99 questions in this topic — answers marked. Sign up to practise the full set with spaced repetition.
Why might a high-street clothing shop choose a town-centre location?
- ✓To be close to a high volume of passing customers
- •To benefit from cheap rural rents and rates
- •To reduce its reliance on website traffic
- •To stay near the manufacturer of its products
Which form of ownership has unlimited liability for its owner?
- •Ltd company
- •Partnership
- •Plc company
- ✓Sole trader
Why is a business plan particularly important for a new start-up?
- •It allows the business to avoid paying any tax
- •It guarantees the new business will make a profit
- ✓It helps secure funding from banks or investors
- •It removes any need to research the market further
Which is an example of external growth for a business?
- •Hiring three new salespeople this year
- •Launching a new product to the existing market
- •Opening one more shop in the same town
- ✓Taking over a competitor company
Which is most likely to be the main aim of a new start-up business?
- •Becoming a multinational by year two
- •Maximising shareholder dividends
- •Reaching national market saturation
- ✓Survival in its first year
Which of these is an internal stakeholder in a business?
- •Customers buying goods
- ✓Employees of the business
- •Local residents nearby
- •Suppliers of materials
Try it for four weeks. Free.
One school. Unlimited classes. No card limit. No teacher limit. If your students aren't practising daily by the end of the trial, you owe us nothing.