Business Prelim

• Durable

  Durable - product made to last for a longer time e.g. motor vehicle, furniture and household appliances
• Non - Durable

  Products which are used up quickly e.g. food, cosmetics and paper products
• Good

  a physical product customer can see and touch (tangible) e.g. mobile devices, furniture, pens
• Service


  Products that cannot be seen or touched (intangible)

  e.g. haircut, babysitting, legal advice
• Entrepreneur 


  a person who comes up with an idea and starts a business to help a cause or make a profit
• Entrepreneur skills and qualities 


  find a gap in the market, communication, motivated, hard working, willing to take a risk
• Business Plan


  • Idea
  • Objectives
  • Financial forecasts
  • Source of finance
  • Location
  • Marketing strategies
• Sole trader


  An individual who owns and runs a business themselves. Sole trader business are usually smaller than other types of businesses e.g. hairdressers, electricians etc. They rely on personal savings, bank loans and loans from family and friends
• Partnership


  a business with 2-20 owners, must produce a partnerdhip agreement, goal is to make a profit and financed by partners saving, bank loans, gouvernment grants
• Private Limited Company (LTD)


  Owned by shareholders, run by a board of directors and financed by selling shares
• Business cycle


  needs & wants

  business provides good/service

  customers buy good/service

  wealth for companies and employees

  consumers have money to spend from wages
• Factors of Production


  Land

  Labour

  Capital

  Enterprise
• Land


  Natural resources used, e.g. water, oil etc
• Labour


  The people who work for a company and contribute to the final product. e.g. cleaners, electricians, front desk staff etc.
• Capital


  Tools and machinery used to create good/service e.g. machinery, buildings motor vehicles etc.
• Enterprise


  The entrepreneur bringing his idea together using all of the other the factors to make a profit
• Sectors of industry - Primary


  Extracting raw material from the earth or growing them e.g. oil extraction, fishing, farming
• Sectors of industry - Secondary 


  Creating products from raw materials from the primary sector e.g. cereal
• Sectors of production - Tertiary


  businesses that provide a service e.g. hairdressers, financial advisers
• Sectors of economy - public


  • owned by taxpayer
  • funded by taxes
  • run by the government
  • The objective is to provide a service, meet peoples needs and provide a service within a budget
• Charity


  • owned by volunteers
  • run by a board of trustees
  • funded by donations
  • heavily regulated by the gouvernment