business real world

• Purpose of business


  Producing goods, supplying services, distributing products, fulfilling a business opportunity, providing a good or service to benefit others
• Reasons for starting a business

  • Producing goods
  • Supplying services
  • Distributing products
  • Fulfilling a business opportunity
  • Providing a good or service to benefit others
• Basic functions and types of business

  • Goods and services, needs and wants
  • Factors of production - land, labour, capital, enterprise
  • Opportunity cost
  • Primary, secondary and tertiary sectors
• Enterprise


  What is meant by an entrepreneur
• Characteristics of an entrepreneur

  • Hard working
  • Innovative
  • Organised
  • Willingness to take a risk
• Objectives of an entrepreneur

  • To be their own boss
  • Flexible working hours
  • To pursue an interest
  • Earn more money
  • Identify a gap in the market
  • Dissatisfaction with current job
• Businesses face a constantly changing business environment due to changes in technology, economic situation, legislation and environmental expectations
• Legal structures that businesses adopt

  • Sole traders
  • Partnerships
  • Private limited companies (ltd)
  • Public limited companies (plc)
  • Not-for-profit organisations
• Benefits and drawbacks of each legal structure


  • Management and control
  • Sources of finance available
  • Liability
  • Distribution of profits
• Limited liability


  Which legal structures benefit from this
• Main aims and objectives for businesses

  • Survival
  • Profit maximisation
  • Growth (domestic and international)
  • Market share
  • Customer satisfaction
  • Social and ethical objectives
  • Shareholder value
• Role of objectives in running a business

  • How and why the objectives set will differ between businesses
  • How and why the objectives set may change as businesses evolve
• The success of a business can be measured in other ways than profit
• Main stakeholders of businesses

  • Owners
  • Employees
  • Customers
  • Local community
  • Suppliers
• Stakeholders' main objectives


  • Maximising pay for workers
  • Minimising environmental impact on local community
  • High dividend payments for owners
• Impact and influence stakeholders have on businesses


  How businesses may face conflict between stakeholders
• Factors influencing the location decision of a business

  • Proximity to the market
  • Availability of raw materials
  • Labour
  • Competition
  • Costs
• Purpose of business planning

  Importance in setting up a new business, raising finance, setting objectives and detailing how functions of a business will be organised
• Methods of expansion


  • Organic growth through franchising, opening new stores and expanding through e-commerce
  • Outsourcing
  • External growth through mergers and takeovers
• Benefits and drawbacks of expansion

  • Economies of scale
  • Diseconomies of scale
• With growth businesses increase the risk of diseconomies of scale occurring due to poor communication, coordination issues and reduced staff motivation