AQA A LEVEL BUSINESS STUDIES
What is a business objective? Why is one needed? - ANSWER-- It is a goal for the
entire organisation
- They guide the actions of those withing the business
What are the main objectives a business might have? (8) - ANSWER-- Growth
- Reduction of risks / diversification
- Profit (reduce production costs / increase price)
- Survive (applicable for most start-up companies
- Cash flow objective (making sure the cash flowing into a business is enough to cover
what must pay out in any period)
- Ethical objectives (environment, fairtrade etc)
- Becoming the market leader
- Stakeholder Objectives (keeping the shareholders / employees / government happy)
What is a Stakeholder? - ANSWER-A stakeholder is an individual / group of peope with
an interest in the business e.g - workers, shareholders, government etc
What is a public limited company? - ANSWER-A company that is owned by
shareholders (generally a larger company)
What does niche mean? - ANSWER-A small specific market aimed at only a few types
of people
How is profit calculated? - ANSWER-total revenue - total cost
(money in - money out)
What are the two types of costs? What are they and what are some examples? -
ANSWER-Fixed cost and Variable cost
Fixed - If output changes, fixed costs do not change
e.g - rent of the building, salary of the worker
Variable - As output changes, so do variable costs
e.g - costs of materials
What do the letters SMART stand for in regards to business objectives? - ANSWER-
Specific
Measurable
Agreed
Realistic
Timescale
^ used for making company goals
,What does qualitative mean? - ANSWER-With no data / facts
What is a mission statement? - ANSWER-A qualitative statement of an organisation's
aims that uses language intended to motivate employees and convince customers,
suppliers and those outside the firm of it's sincerity and commitment
How and why does a company's mission link to its objectives? - ANSWER-- Objectives
allow companies to reach the aims in their mission statement
- A company must understand it's mission / overall goals to form objectives
How do we structure an 8 mark analysis question? - ANSWER-PECAn
Point
Explain
Context
Analysis
What is the difference between a public and a private sector business? - ANSWER-
Public sector - controlled by the government (things we should all have the right to)
Private sector - privately owned (shareholders / owners)
What are some examples of each business sector? - ANSWER-Public - BBC, NHS,
Ofsted
Private - ITV, Bupa, Coca-Cola
What are the advantages of private over public sector and vice-versa? - ANSWER-
Public - more available, worse service, paid for through tax (funded by the government)
Private - less available, better service (each company is competing for your money),
paid for directly by the consumer
What is the difference between an incorporated and unincorporated business? -
ANSWER-An unincorporated business is a business whereby there is no legal
distinction between the business and the owner.
An incorporated business has a separate legal identity to its owner(s).
What is a liability? - ANSWER-A debt or financial obligation for which someone is
responsible
What is the difference between limited and unlimited liability? Which kinds of
businesses have which kind of liability? - ANSWER-Unlimited: The owner(s) is
personally responsible for the company (possessions can be repossessed)
Limited: Owner / shareholders are not personally responsible for the company
, An unincorporated business have unlimited liability. An incorporated business will have
limited liability
What is a Sole Trader? What kind of liability do they have? - ANSWER-A Sole Trader is
one person setting up their own business. They have Unlimited Liability
What are some Pros and Cons of being a Sole Trader? - ANSWER-Pros: You get all
the profit
Cons: There's much more risk, possessions can be repossessed, you have to rely on
yourself / external corporation if you have any problems
What is a Partnership? What kind of liability do they have? - ANSWER-2 or more people
with an equal share in the company.
They have Unlimited Liability
What are some Pros and Cons of being in a Partnership? - ANSWER-Pros: Distributes
risk, increases growth which means increased profits, increased budget
Cons: Still liable for the company, less percentage of the profit goes to the original
owner
What is a Private Limited Company (LTD)? What kind of liability do they have? -
ANSWER-Has shareholders, but only those invited.
They have Limited Liability
What are some Pros and Cons of an LTD? - ANSWER-Pros: Less risk because you're
not liable, less risk than a PLC because it's not public, so no risk of a takeover, even
more increased growth
Cons: Less percentage of the profit goes to the original owner
What is a Public Limited Company (PLC)? What kind of liability do they have? -
ANSWER-A company on the stock exchange (any member of the public can become a
shareholder)
They have limited liability.
What are some Pros and Cons of a PLC? - ANSWER-Pros: Bigger overall company,
greater growth / profits
Cons: - Legally requires transparency in financial records (since it's public)
- At risk of a hostile takeover (where an individual / individuals obtain 51% or more of
the total overall shares)
- Less percentage of the profit goes to the original owner
Which legal business structures have shareholders? - ANSWER-LTD's and PLC's
Which legal business structures need at least £50,000 share capital to be set up? -
ANSWER-LTDs and PLCs
What is a business objective? Why is one needed? - ANSWER-- It is a goal for the
entire organisation
- They guide the actions of those withing the business
What are the main objectives a business might have? (8) - ANSWER-- Growth
- Reduction of risks / diversification
- Profit (reduce production costs / increase price)
- Survive (applicable for most start-up companies
- Cash flow objective (making sure the cash flowing into a business is enough to cover
what must pay out in any period)
- Ethical objectives (environment, fairtrade etc)
- Becoming the market leader
- Stakeholder Objectives (keeping the shareholders / employees / government happy)
What is a Stakeholder? - ANSWER-A stakeholder is an individual / group of peope with
an interest in the business e.g - workers, shareholders, government etc
What is a public limited company? - ANSWER-A company that is owned by
shareholders (generally a larger company)
What does niche mean? - ANSWER-A small specific market aimed at only a few types
of people
How is profit calculated? - ANSWER-total revenue - total cost
(money in - money out)
What are the two types of costs? What are they and what are some examples? -
ANSWER-Fixed cost and Variable cost
Fixed - If output changes, fixed costs do not change
e.g - rent of the building, salary of the worker
Variable - As output changes, so do variable costs
e.g - costs of materials
What do the letters SMART stand for in regards to business objectives? - ANSWER-
Specific
Measurable
Agreed
Realistic
Timescale
^ used for making company goals
,What does qualitative mean? - ANSWER-With no data / facts
What is a mission statement? - ANSWER-A qualitative statement of an organisation's
aims that uses language intended to motivate employees and convince customers,
suppliers and those outside the firm of it's sincerity and commitment
How and why does a company's mission link to its objectives? - ANSWER-- Objectives
allow companies to reach the aims in their mission statement
- A company must understand it's mission / overall goals to form objectives
How do we structure an 8 mark analysis question? - ANSWER-PECAn
Point
Explain
Context
Analysis
What is the difference between a public and a private sector business? - ANSWER-
Public sector - controlled by the government (things we should all have the right to)
Private sector - privately owned (shareholders / owners)
What are some examples of each business sector? - ANSWER-Public - BBC, NHS,
Ofsted
Private - ITV, Bupa, Coca-Cola
What are the advantages of private over public sector and vice-versa? - ANSWER-
Public - more available, worse service, paid for through tax (funded by the government)
Private - less available, better service (each company is competing for your money),
paid for directly by the consumer
What is the difference between an incorporated and unincorporated business? -
ANSWER-An unincorporated business is a business whereby there is no legal
distinction between the business and the owner.
An incorporated business has a separate legal identity to its owner(s).
What is a liability? - ANSWER-A debt or financial obligation for which someone is
responsible
What is the difference between limited and unlimited liability? Which kinds of
businesses have which kind of liability? - ANSWER-Unlimited: The owner(s) is
personally responsible for the company (possessions can be repossessed)
Limited: Owner / shareholders are not personally responsible for the company
, An unincorporated business have unlimited liability. An incorporated business will have
limited liability
What is a Sole Trader? What kind of liability do they have? - ANSWER-A Sole Trader is
one person setting up their own business. They have Unlimited Liability
What are some Pros and Cons of being a Sole Trader? - ANSWER-Pros: You get all
the profit
Cons: There's much more risk, possessions can be repossessed, you have to rely on
yourself / external corporation if you have any problems
What is a Partnership? What kind of liability do they have? - ANSWER-2 or more people
with an equal share in the company.
They have Unlimited Liability
What are some Pros and Cons of being in a Partnership? - ANSWER-Pros: Distributes
risk, increases growth which means increased profits, increased budget
Cons: Still liable for the company, less percentage of the profit goes to the original
owner
What is a Private Limited Company (LTD)? What kind of liability do they have? -
ANSWER-Has shareholders, but only those invited.
They have Limited Liability
What are some Pros and Cons of an LTD? - ANSWER-Pros: Less risk because you're
not liable, less risk than a PLC because it's not public, so no risk of a takeover, even
more increased growth
Cons: Less percentage of the profit goes to the original owner
What is a Public Limited Company (PLC)? What kind of liability do they have? -
ANSWER-A company on the stock exchange (any member of the public can become a
shareholder)
They have limited liability.
What are some Pros and Cons of a PLC? - ANSWER-Pros: Bigger overall company,
greater growth / profits
Cons: - Legally requires transparency in financial records (since it's public)
- At risk of a hostile takeover (where an individual / individuals obtain 51% or more of
the total overall shares)
- Less percentage of the profit goes to the original owner
Which legal business structures have shareholders? - ANSWER-LTD's and PLC's
Which legal business structures need at least £50,000 share capital to be set up? -
ANSWER-LTDs and PLCs
