Business Studies

• Stages of the business life cycle

  • Establishment
  • Growth
  • Maturity
  • Post-maturity
• Establishment


  1. Generating revenue

  2. Choosing a suitable location

  3. Appropriate marketing strategies for awareness
• Growth


  1. Controlling stock (not overstocked and understocked)

  2. Making sure they don't expand too quickly to lose control over the business
• Maturity


  1. Maintain consumer loyalty and interest

  2. Motivating employees

  3. Financial position

  4. Threats from competitors
• Post-Maturity


  1. Aware of its legal responsibilities

  2. Creating a culture in the workplace
• Steady state


  The path in the post-maturity stage of the business life cycle, when the business maintains its position
• Renewal


  Provides management with an opportunity to revitalise the business/ or product range
• Decline


  Occurs when the business has been unsuccessful in addressing the various challenges it has faced in its earlier stages
• Cessation


  Refers to the closure of a business
• Factors that can contribute to business decline

  • Inadequate leadership skills
  • Unclear business plan
  • Poor cash management
  • Insufficient emphasis on the customer
• Voluntary Cessation


  When the owner of a business decides to cease its operations
• Involuntary Cessation


  When the closure of the business is forced on the owner
• Liquidation


  Occurs when all assets of a business are sold to generate cash to pay liabilities and creditors
• External influences


  • Economics
  • Financial
  • Geographic
  • Social
  • Legal
  • Political
  • Institutional
  • Technological
  • Competitive situations
  • Markets
• Internal influences


  • Products
  • Location
  • Resources
  • Management
  • Business culture
• Goods


  An item that businesses produce that can be seen and touched
• Services


  A tangible product that is performed by another person
• Inputs


  The resources
• Outputs


  The goods and or services produced using various inputs
• Profit


  Needed for long-term survival, measured by the return on investment
• Employment


  Goods and services are produced using the knowledge, skills and effort of human resources
• Incomes


  Employees are paid an income by the business
• Choice


  Encourages businesses to provide goods and services at the lowest possible price with the highest quality
• Innovation


  The process of improving the features of a product to be appealing to consumers
• Entrepreneurship and risk


  An entrepreneur is an individual who has developed certain ideas and is willing to take a risk to implement these ideas through a business
• Wealth


  The total value of all assets owned by a person or business
• Quality of life


  Business research and development has contributed to a significant improvement in our quality of life
• Business size


  • Micro
  • Small
  • Medium
  • Large
• Small to medium enterprises (SMEs)

  Fewer than 200 full-time equivalent employees and/or less than $10 million turnover
• Business location


  • Local
  • National
  • Global
• Business industry


  • Primary
  • Secondary
  • Tertiary
  • Quaternary
  • Quinary
• Business legal structure


  • Sole trader
  • Partnership
  • Private company
  • Public company
  • Government enterprise
• Franchise


  A business whereby the owner licences its operations—along with its products, branding, and knowledge—in exchange for a franchise fee
• Incorporated business


  A separate entity from the business owner and has natural rights
• Unincorporated business


  The business owner and the business are the same, and the owner personally bears all results of the business
• Entrepreneur


  An individual who sets up a business or businesses, taking on financial risks in the hope of profit
• Features of Effective Management

  • Planning
  • Organising
  • Leading
  • Controlling
• Effective Management Goals


  • Profitability
  • Sales and market share
  • Growth of the business
  • Share value
  • Community involvement
  • Environmental sustainability
• Increase in productivity


  Makes it easier for the business to be more profitable because costs are lowered- the business is able to produce more outputs with the same inputs
• Outputs


  The goods and/or services produced by a firm using inputs