Benefits of Increasing Output and Growing Businesses

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What is the purpose of a business plan?

To decide on the legal structure of the business

To outline business objectives and important operational details (correct)

To determine the price of the selling product

To increase taxes for the government

Why is it important for entrepreneurs to have a business plan when seeking a bank loan?

To determine the legal structure of the business

To show banks the objectives and details of the new business (correct)

To understand how to control strategic industries

To increase profits for the business

In what way does growing a business benefit the government?

By reducing taxes collected from businesses

By decreasing employment opportunities

By increasing the control over public sector organizations

By enabling the collection of more taxes as businesses grow (correct)

What distinguishes private sector businesses from public sector organizations?

Private sector businesses are not profit motivated, unlike public sector organizations Signup and view all the answers

How do entrepreneurs benefit society other than through jobs and profits?

By creating social enterprises that benefit society Signup and view all the answers

Why are strategic industries like energy and defense under state control?

Because they are not profit motivated Signup and view all the answers

What is the primary purpose of having rules about profit-sharing and other partnership arrangements in a business?

To allow the business to continue growing through reinvestment of profits Signup and view all the answers

What is the initial payment a franchisee must make to the franchisor?

A start-up fee for the franchise agreement Signup and view all the answers

What is the primary benefit of franchising to the franchisor?

The franchisor can collect royalties and start-up fees from each franchise Signup and view all the answers

What is the primary reason a franchisor would be willing to allow others to trade under their brand name?

The franchisor has developed a successful business model and wants to share it with others Signup and view all the answers

If three partners invest $10,000, $20,000, and $50,000 respectively, how will the profits be shared among them?

In proportion to the amount of capital invested by each partner Signup and view all the answers

What is the primary function of the 'essential equipment' provided by the franchisor to the franchisee?

To provide the franchisee with the necessary tools and resources to operate the business Signup and view all the answers

What is a key benefit of franchisee having local knowledge for the franchisor?

Ensuring the success of the franchisor Signup and view all the answers

Which document is responsible for setting out the constitution and details about a company?

Memorandum of Association Signup and view all the answers

What does a limited liability company being incorporated create?

A separate legal entity Signup and view all the answers

Which document is responsible for dealing with the internal running of a company?

Articles of Association Signup and view all the answers

What must be sent to the registrar of companies before a limited company can be formed?

Important legal documents like Memorandum & Articles of Association Signup and view all the answers

What is one key detail that must be included in the Memorandum of Association?

Objectives of the company and nature of its activities Signup and view all the answers

Which factor can contribute to the reduction of competition between companies in a joint venture?

Co-operation in the joint venture Signup and view all the answers

What is a potential drawback mentioned regarding some joint ventures?

Disagreements about management Signup and view all the answers

How can disagreements about the management of a joint venture impact its success?

Reduce profitability Signup and view all the answers

In a 50:50 joint venture, what is a common issue that may arise?

Different views on direction Signup and view all the answers

How does sharing responsibility within companies benefit a joint venture?

Reduces competition Signup and view all the answers

What is a characteristic of private limited companies?

Family-owned and cannot issue shares to the public Signup and view all the answers

In what scenario can a private limited company convert to a public limited company?

By issuing shares to the public and having share capital exceeding £50000 Signup and view all the answers

What is a limitation of joint ventures in business?

They prevent companies from maintaining their identity Signup and view all the answers

What does the abbreviation 'Ltd' indicate in a company name?

It's a private limited company Signup and view all the answers

What action should a private limited company take to become a public limited company?

Issue shares to the public and meet a certain share capital threshold Signup and view all the answers

What advantage do joint ventures offer to businesses?

Higher turnover without losing business identity Signup and view all the answers