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BS Unit 1.1: Starting a Business Cheat Sheet by

Business Studies cheat sheet for GCSE

Topic 1.1: Starting A Business - Defini­tions

an organi­sation or system where goods and services are exchanged for one another or for money
a person(s) who sets up their own business
a business or a company
Social Enterprise
an activity that achieves a reward for society
Gap In The Market
an unmet customer need or a group of potential customers who are not yet purchasing a good or service
the way buyers and sellers are brought together
Mass Market
a large market; a produc­t/s­ervice aimed at a wide range of people
Niche Market
a small, specia­lised market; a produc­t/s­ervice aimed at a small group of people
when one business (see Franchisor) gives another person or business (see Franchisee) the right to trade using its name to sell its products or provide its services
the company that allows an individual (see Franchisee) to run a location of their (the franch­isor’s) business
someone who buys and runs a location of a franchise
anyone who has an interest (or stake) in a business
Primary Stakeh­older
essential to the success or failure of the business (e.g.: customers)
Secondary Stakeh­older
feel they are involved in the organi­sat­ion’s future (e.g.: pressure groups)
Internal Stakeh­older
people who’re already committed to serving your organi­sation (e.g.: board members)
External Stakeh­older
indivi­duals or groups from outside that’re affected by the conseq­uences and outcomes of an organi­sat­ion’s decisions (e.g.: suppliers)
Sole Trader
a person who is the only owner of a business, entitled to keep all profits after tax has been paid but liable for all losses (unlimited liability)
a legal form of business operation between two or more indivi­duals who share management and profits
Private Limited Company (Ltd)
can only have between 2 – 50 members; shares are sold privately among family­/fr­ien­ds/­col­lea­gue­s/etc
Public Limited Company (Plc)
has shares that can be publicly traded on a stock market
the share of the profit that shareh­olders get from a company
the buying and selling of goods and services over the Internet; also for advert­ising
a location connected to the Internet that maintains web pages

Advantages Of Franch­ising

Lower risk option
Already establ­ished
Recognised brand
National advert­ising and promotion
Tried and tested

Disadv­antages Of Franch­ising

Set up and running costs can be high
Damage to brand reputation
Reliant on others
Less indepe­ndence in decision making
Shared profit

Unlimited Liability

Respon­sible for all debts
Must pay off debts using own money
May have to sell house/car in order to pay debts off

Limited Liability

Means that investors can only lose money they've invested and no more
Cannot lose their personal posses­sions if the business goes into liquid­ation
Owners only lose the money they invested in the business

Things To Think About When Moving Locations

Labour costs
Availa­bility of land
Labour skills
Financial help
Close to custom­ers­/market
History and tradition
Transport links

The Internet Factor

opport­unity to compete with large companies
sell products in online and mail-order services
upsurge forcing businesses to sell online as well


Growth (including employees)
Increase market share
Break even
Brand awaren­ess­/re­cog­nition


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