THEME 1

• why do new business ideas come about?

  changes in technology ● changes in what consumers want ● products and services becoming obsolete
• How new business ideas come about:

  ● original ideas ● adapting existing products/services/ideas.
• The impact of risk and reward on business activity:

  ● risk: business failure, financial loss, lack of security ● reward: business success, profit, independence.
• The role of business enterprise and the purpose of business activity:

  ● to produce goods or services ● to meet customer needs ● to add value: convenience, branding, quality, design, unique selling points
• The role of entrepreneurship:

  ● an entrepreneur: organises resources, makes business decisions, takes risks
• Identifying and understanding customer needs:

  ● what customer needs are: price, quality, choice, convenience ● the importance of identifying and understanding customers: generating sales, business survival.
• The purpose of market research

  ● to identify and understand customer needs ● to identify gaps in the market ● to reduce risk ● to inform business decisions.
• Methods of market research

  ● primary research: survey, questionnaire, focus group, observation ● secondary research: internet, market reports, government reports.
• The use of data in market research:

  ● qualitative and quantitative data ● the role of social media in collecting market research data ● the importance of the reliability of market research data.
• How businesses use market segmentation to target customers:

  ● identifying market segments: location, demographics, lifestyle, income, age ● market mapping to identify a gap in the market and the competition.
• Understanding the competitive environment:

  ● strengths and weaknesses of competitors based on: price, quality, location, product range and customer service ● the impact of competition on business decision making.
• Business aims and objectives when starting up:

  ● financial aims and objectives: survival, profit, sales, market share, financial security ● non-financial aims and objectives: social objectives, personal satisfaction, challenge, independence and control.
• The importance of cash to a business:


  ● to pay suppliers, overheads and employees ● to prevent business failure (insolvency) ● the difference between cash and profit.
• Sources of finance for a start-up or established small business:

  ● short-term sources: overdraft and trade credit ● long-term sources: personal savings, venture capital, share capital, loans, retained profit and crowd funding.
• The concept of limited liability:


  ● limited and unlimited liability ● the implications for the business owner(s) of limited and unlimited liability.
• The types of business ownership for start-ups:

  ● sole trader, partnership, private limited company● the advantages and disadvantages of each type of business ownership.