Paper 1

• what is business enterprise

  process of identifying new buisness opportuinites and taking advantage of them.
• purpose of business activity (3)

  - provide people with a good or service

  - meet customer needs

  - add value to an existing product
• ways to add value to a product (4)

  - convenice for customer

  - building a good brand image (customers will be willing to spend more money)

  - improve design and/or quality

  - unique selling point (USP), differs from its competitors
• why do new business ideas come about? (3)

  - changes in technology

  - changes in what consumers want

  - products and services becoming obsolete
• how do new business ideas come about? (2)

  - original ideas

  - adapting existing ideas
• what is an entrepreneur?

  someone who takes on the risk of enterprise activity
• what traits do entrepreneurs have to have? (3)

  - organise resources

  - take risks

  - make buisness decisions
• risks of running a business (3)

  - financial loss

  - lack of security

  - buisness failure
• rewards of running a business (3)

  - buisness success

  - profit

  - independence
• what does the word market mean (3)

  - place

  - product

  - customers
• factors that affect competition (5)

  - price

  - customer service

  - quality

  - product range

  - location
• Why is it useful to find about about customers when doing market research?

  - all business needs customers to buy their products

  - they can use market segmentation

  - customer needs may include :

  - type of product

  - quality

  - price

  - convenience

  - choice

  - by understanding customer needs businesses will be better able to make products that meet customer needs

  - this will increase sales
• how market research helps buisnesses (3)

  - helps to make informed decisions

  - reduce risk

  - spot a gap in the market ( a customer need that isnt being met)
• what is primary market research

  - data collected first hand for a specific research purpose
• what are some examples of primary market research? (4)

  - questionnaires

  - surveys

  - focus groups

  - observation
• why are large samples of market research better?

  - most accurate but also more expensive
• what is secondary market research

  - data that already exists and which has been collected for a different purpose
• what are some examples of secondary market research (4)

  - government reports

  - internet

  - magazines

  - newspapers
• why is secondary market research often used by small businesses? (2)

  - a lot cheaper

  - data already exists and is easily found
• what are some disadvantages of secondary marker research? (3)

  - out of date

  - not always relevant to your needs

  - not specifically about your product
• how can social media be used as market research? (4)

  - apps such as facebook and twitter have profiles of people on the internet

  - include things that they enjoy

  - buisnesses collect this data and use it for market research

  - for example , what is trending or popular
• what is qualitative data?

  data based on peoples opinions
• what is quantitative data?

  data based on numbers
• how can you check if market research is reliable?


  - results can be repeated by another researcher
• what is market segmentation?

  people within a market are divided into different groups
• what catagories may the market be segmented in? (4)


  - age

  - income

  - location

  - lifestyle
• how does mapping the market help a buisness?


  - helps understand their location within the market and the markets key features
• what can buisnesses find out from market maps? (2)


  - competition

  - gaps in the market
• financial aims of a business (5)

  - survival

  - maximise profit

  - increase market share

  - maximise sales

  - achieve financial security
• non-financial aims of a buisnesss (4)

  - accomplishing a challenge

  - personal satisfaction

  - independence and control

  - doing whats right for society
• what are objectives?

  measurable steps on the way to the aim
• factors that affect aims and objectives (3)


  - size and age of the business

  - who owns the business

  - level of competition
• Revenue formula


  Price x Quantity sold
• variable costs meaning


  costs that wil increase as the buisness expands
• how to work out total variable cost


  quantity sold x variable cost per unit
• what are fixed costs?

  costs dont vary with the amount the builder produces
• how to work out total costs

  variable costs + fixed costs
• how to work out interest

  total repayment - borrowed amount/borrowed amount x 100
• how to work out profit

  revenue - costs
• what does breaking even mean


  covering costs