Business Activities

• Definition: the formation of a new business or development of a new good or service to be introduced to the market

  Business Enterprise
• Financial motives of entrepreneurs

  • Generate a profit

  •Provide employment for self

  •Financial security for self and family
• Rewards of being an entrepreneur

  • Be own boss

  • Flexible work hours

  • Self-satisfaction

  • Provide employment for self and others

  • Earn more money (profit)
• Risks of being an entrepreneur

  • Low sales

  • Loss of security

  • Damage to reputation if fail

  • No definite income

  • Unexpected costs e.g. rise in rent
• Functions of an entrepreneur

  • Set up the business

  • Have the ideas

  • Takes risks

  • They invest the money

  • They earn the profits
• Definition: A person who sets up a business by taking on the financial risks in the hope of making a profit

  Entrepreneur
• Why do people want to set up their own business?

  • Personal ambitions

  • To be their own boss

  • Gap in the market

  • To keep the family business running

  • Theres no work available
• Non-financial motives of entrepreneurs

  • Be own boss

  • Self-satisfaction

  • Fill a gap in the market

  • Create employment for others
• Social/community motives of entrepreneurs

  • Social enterprises are those whose prime objective is to do good in society rather than make a profit

  • Surplus revenue is used to support a specific cause e.g. a children's charity or community group
• Definition: Where raw materials are produced, e.g. farming, mining, forestry

  Primary sector
• Definition: Where the raw materials are manufactured into goods, e.g. factories

  Secondary sector
• Definition: Businesses in this sector provide a service, e.g. retailer, hotel, school

  Tertiary sector
• Definition: this process links to the primary, secondary and tertiary sectors together in the production process

  Chain of production
• Definition: the final users of goods and services. They are at the end of the distribution channel

  Consumers
• Definition: Items that you have to have in order to survive

  Needs
• Definition: Items that you would like to have but are not necessary to your survival. They enhance your lifestyle

  Wants
• Factors of production

  • Land: The natural resources that are needed to produce goods

  • Labour: Physical and mental element that is needed to produce goods and services

  • Capital: The money and fixed capital that is needed to produce goods and services

  • Enterprise: These people have the ideas to start a business and organise the other 3 factors of production
• Definition: goods which are produced for the final consumer

  Consumer goods
• Definition: goods which are produced for other businesses to be able to produce other goods and services

  Producer goods
• Definition: consumer goods which are not used at once and do not have to be bought frequently because they last for a long time

  Durable goods
• Definition: goods which are immediately consumed or which have a lifespan of 3 or less years

  Non-durable goods
• Definition: Sells goods to customers. Small retailers buy their stock from wholesalers but large-scale retailers buy directly from manufacturers

  Retailers
• Definition: Sells goods to customers. Small retailers buy their stock from wholesalers but large-scale retailers buy directly from manufacturers

  Retailers
• Functions of a retailer

  • Display goods

  • Distibute goods

  • Buy from wholesalers

  • Give customers advice

  • Deal with faulty goods/complaints
• Definition: Services provided for individuals. They include services for personal grooming, house maintenance, car repair, etc

  Personal services
• Definition: Where buyers and sellers meet in order to exchange goods and services, often for money

  Markets
• Definition: services that provide mainly to business such as transport and warehousing, but they may also be available to individuals such as insurance and banking

  Commercial services
• Public sector

  • owned by government

  • provides public goods

  • helps reduce inequality in society

  • government jobs to protect environment
• Private sector

  • not owned by government

  • profit incentive to be efficient

  • entrepreneurs create jobs where needed

  • doesn't require taxes to fund
• Definition: means that the owners of a business are responsible for all of the debts of a business. Personal belongings may need to be given up to pay the debts of the business

  Unlimited liability