Unit 1

• Business


  An organisation that exists to produce goods and services on a commercial basis to customers
• Goods


  A physical product, such as a mobile phone
• Services


  An intangible product, such as a visit to the cinema
• Needs


  Goods and services that we have to consume if we are to live. These include food, shelter and warmth.
• Wants


  Goods and services that we would like, but do not have to consume in order to survive. These include holidays, smartphones.
• Primary


  These businesses produce raw materials which are extracted from nature. E.g. Farming
• Secondary


  These businesses manufacture goods which are made from raw materials and turned into finished goods. Eg. Car manufacturing
• Tertiary


  Inputs available to supply goods and services in an economy. E.g. Shops and banking.
• Land


  This is not only the land where the business is based, but also includes the natural resources on, or under, that land.
• Labour


  These are all the people working in the business including the managers
• Capital


  This refers to the buildings and machinery needed by the business
• Enterprise


  The entrepreneurs who set up the businesses, organise the factors of production and take the risks involved in running the business
• Entrepreneur


  Someone who takes a calculated risk through starting a business.
• Business environment


  Businesses are constantly faced with change. Some of these changes will be outside the control of the organisation. Examples of external changes that businesses face include new legislation, changes in the economy, new technology, political events and even the weather.
• Opportunity cost


  The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.
• Factors of production


  The inputs (resources) available to supply goods and services in an economy. These are Land, Labour, Capital & Enterprise.
• Business sectors


  Different types of businesses can be classified as being primary, secondary and tertiary.
• Reasons for starting a business

  • Idea for a new product or service
  • Ideas to improve an existing product or service
  • Spotting a gap in the market
  • To utilise particular skills or qualities
  • To earn an income/make a profit
  • To be their own boss
  • To gain employment/redundancy
  • To pursue a hobby or an interest
  • To benefit others and not for profit
• What makes a good entrepreneur?

  • Innovative
  • Risk-takers
  • Hard working
  • Organised
  • Determined
  • Persuasive
  • Leadership
  • Lucky