Business 1.1

• Dynamic 


  Continual change
• Business


  an organisation that

  seeks to satisfy the needs and wants

  and wants of consumers through the

  production of goods and services
• Consumer


  end user of the product or service
• Obsolete


  when a product is outdated and decreases in sales
• Entrepreneur


  an individual who comes up with a business idea and is willing to take a risk to develop it
• How do business ideas come about?

  Changes in technology

  Change in consumer wants

  Products and services becoming obsolete
• Risk


  something that could potentially break the business
• Reward 


  something that can benefit the business
• Examples of risks


  Business failure

  Financial Loss

  Lack of security
• Ways a business can fail

  -entrepreneur does not know the market well

  -not having enough capital to start the business

  -poor decision making

  -competition from other businesses

  -not meeting the needs of customers
• USP


  Unique Selling Point
• Adding value


  adapting a product so that the selling price is higher than the cost of creating the product
• Rewards through business success

  -profit

  -personal independence

  -business success e.g. personal satisfaction, excellent products/services, growth
• Tangible 


  Something you can touch
• Intangible 


  Something you cannot touch
• Independence


  the need by many business owners to make their own decisions and be their own boss
• Lack of financial security


  uncertainty for the business owner about day-to-day family income and assets
• Ways to reduce risk:

  -to carry out market research to understand customer needs

  -produce a cash-flow forecast to identify times when the business may experience shortage of cash inflow
• Ways to add value:

  -Convenience

  -Branding

  -Quality

  -Design

  -USPs
• What does an entrepreneur do:

  -organises resources

  -makes business decision

  -takes risks