1.1 What is Business

• Businesses are organisations that produce goods and services
• Wants are people's desires and needs are people's necessities.
• Consumers use a good/service. Customers pay for the good/service.
• The 4 functional parts of a business are human resources, finance and accounts, marketing and operations management.
• Primary sector businesses extract natural resources ie. mining and agriculture.
• Secondary sector businesses manufacture resources into goods ie. factory.
• Tertiary sector businesses provide services ie. hairdressers and accounting.
• Quaternary sector businesses are intellectual and knowledge based ie. science and space.
• The chain of production is extraction -> manufacturing -> services -> consumers (value added)
• Entrepreneurs plan, organize and manage a business. They take risks, have a vision, receive profit, are responsible for employees and may take a personal cost.
• A business is a decision making organisation that uses inputs in the process of producing goods and/or services as outputs.
• Human resources manages the personnel of the organisation and is involved with workforce planning, recruitment, training etc.
• Finance and accounts manages the organisation's money and requires accurate recording and reporting to comply with legal requirements and inform stakeholders of the organisation's finances.
• Marketing is responsible for identifying and meeting the needs and wants of customers.
• The 7 Ps of marketing are product, price, place, promotion, people, processes and physical evidence.
• Operations management are responsible for the conversion of raw materials into components and finished goods or in a services business the distribution of services to consumers.
• Common challenges for new businesses include production problems, a poor location, people management problems, external influences, legalities, marketing problems, an unstable customer base, lack of finance capital, high production costs and cash flow problems.
• Growth: Entrepreneurs may choose to start a business knowing that capital growth means their business assets can appreciate in value.
• Earnings: Entrepreneurs may choose to start a business for higher earnings than a standard job.
• Transference and inheritance: Entrepreneurs may choose to start a business as a way to secure the future of their family it can be be transferred to their children in inheritance.
• Challenge: Entrepreneurs may choose to start a business to challenge themselves in an enjoyable way.
• Autonomy: Entrepreneurs may choose to start a business to find autonomy running a business self-employed.
• Security: Entrepreneurs may choose to start a business being self-employed ensures higher job security.
• Hobbies: Entrepreneurs may choose to start a business to pursue their passion or hobby through their business.
• A business plan typically includes an executive summary, business description, human resource plan, financial plan, marketing plan and operations plan.
• The 4 factors of production are land, labor, entrepreneurship and capital.
• GET CASH outlines the opportunities for starting a business and includes growth, earnings, transference and inheritance, challenge, autonomy, security and hobbies.