PPE Revision

• What is the term 'goods'?

  • A physical product you can touch -> furniture store, petrol station
• What is the term 'services'?

  • A non-physical product soemone does for you -> hair dressers, airline, car wash
• Raw materials?

  • natrual resources that can be used to make goods and services -> chairs, table, food
• Supplier?

  • A business which sells or supplies products to another business
• Market?

  • Where buyers and sellers meet to exchange goods and services
• Customer?

  • A person or organisation which buys or is supplied by a business
• Consumer?

  • The person who uses (consumes ) a product
• Where would customers and consumers be the different?

  • Pampers because the customer would be the parents and the consumer would be the baby
• Where would customers and consumers be same?

  • Ice cream because the customers can be a parent who also consumes the product
• Entrepreneur?

  • Someone who creates a business who takes risks with the aim of making a profit from the business
• Characteristics of being an entrepreneur?

  1. Visionaries
  2. Takes risks
  3. never gives up
  4. driven by ideas
  5. makes things happen and doesn't wait
• Why is coming up with an original idea risker then using adaption

  • It is riskier because no one might not buy the products or use the services which will result in business failure and financial loss
  • Adaption is less riskier because you are adapting a product or service that is already produced which means there is customers
• Explain how new technology might result in new ideas being developed?

  • it means there will be more of a range of products which might attract more customers, therefore increasing profitability
• What are 3 ways where business success can be measured in?

  1. profit
  2. customer satisfaction
  3. owner satisfaction
• What is the formula for profit?


  Profit= Revenue - Total costs
• Customer needs?

  • Identifiying what the customers need and want and improving your products by them
• Adding value?

  • The difference between the cost of materials imputs and the price charged
• Ways to add value?

  • Branding
  • conveniance
  • quality
  • USP
  • Design
• What are the risks that are associated in being an entrepreneur?

  • Money
  • Lack of security
  • Uncertainty
• What decisions would an entrepreneur need to make?

  • target market/audience
  • spending money
  • what to take risks on
• Explain how businesses might be affected by actions of competitors?

  • If your business is not meeting customer needs to isn't attracting customers they would turn to the competitors which would result in business faliure.
• Why is completing research effective to meeting customer needs?

  • The information found can be used to develop your products or services which will then meet the customer needs so more profit
• What happens if you fail to meet customer needs?

  • If you fail to meet customer needs then your business will not make any profit which will effect your own daily needs therefore financial loss
• Customer/target market?

  • The segments that a bsuiness is trying to sell their products too' service too
• Market trend?


  The directions the prices are moving in based on where they have been in the past -> it helps businesses to understand where the market is heading and the new opportunities available
• What is the formula for revenue?


  Revenue = Sales x Average price of sales
• What is the formula for break-even point?


  Break-even Point = fixed costs / sales price - variable cost
• What is the formula for margin of safety?


  Margin of Safety = current sales level - breakeven point /current sales level
• What is the formula for percentage change?


  Percentage Change = difference / origanal x 100
• Bank Loan


  When you take money from the bank and you repay it back with interest

  • Long term
  • Adv : Can take out large amounts
  • Dis : Have to pay back with interest (can be expensive)
• Personal Savings


  When you invest in your business using your own money

  • Short term
  • Adv: does not need to be paid back
  • Dis: High risk - might loose all the money and will not have enough for basic needs
• Trade Credit

  Buy now, Pay later

  • Short term
  • Adv: can buy supplies without having to pay for it immediately
  • Dis : No extra profit or money
• Venture Capital 


  Money invested from an individual or group that is willing to take the risk of funding into a new business for a share of the profit

  • Long term
  • Adv : They can raise large amounts of money for business
  • Dis : They take a share of the profit
• Crowd funding


  Large number of people investing into a business such as Gofundme

  • Long term
  • Adv : Acts as a form of market research, if people don't invest, won't attract customers
  • Dis : Difficult to reach funding target, less then 33% reach it
• Overdrafts


  When the bank allows you to spend more money then there is in your bank account

  • Short term
  • Adv : Quick to arrange
  • Dis : High interest rates
• Gap in the Market?


  A group of customers who's needs are not being met.
• Quantitative Data

  • Numerical Data, shown through numbers
• Qualitative Data

  • Data from thoughts and opinions
• Explain how social media could be used to complete market research


  Social media like Facebook and Instagram can allow businesses to know what products and services everyone loves vs what they dislike and won't use.

  Beneficial to businesses as they now know what will attract customers
• 5 different ways to segment a market

  1. Age
  2. Gender
  3. Religion
  4. Location
  5. Income