Business studies-Topic1-Eneterprise

• What is a business?

  Organization producing goods; services in the hope of profit
• What is a competitive environment?

  A business environment where businesses producing similar goods; services compete for customers.{market share}
• What is meant by a dynamic environment?

  Business world is constantly changing
• What is interdependency?

  Working with other businesses to achieve objectives. Actions of 1 business effect the other. A positive interdependent nature with other businesses more likely to receive stock on time, discount etc.
• What's a good?

  Tangible item
• Whats a consumer good?

  Goods consumed by final user.
• Producer good?

  Goods bought by a company used to produce other goods/services
• Whats a durable good and non-durable?

  Durable last 3+ yrs , non-durable last less such as food.
• whats a service?

  Intangiable value-added activity provided by a company.
• Personal service?

  Provided for individuals. House maintenance , grooming etc.
• Commercial service?

  Provided to a business eg. transport[logistics] and warehousing. Also available to individuals eg. banking.
• Goods and services are provided by public and private sectors
• Public sector organisations are operated and owned by the government such as the NHS in the UK
• Private sector organisations are owned by individuals in hope or profit in selling goods/services.
• 4 factors of production are land, labour , capital and enterprise
• Land is all natural resources [area built on, wood, materials]
• Labour is the people who work within the business like employees
• Capital is the money invested into the business to buy assets such as machinery
• Enterprise is the entrepreneurial ability to start a business, run a business in taking risks and foresee economic climate etc.
• Business enterprise involves an individual/group seeing a gap in the market or others making profit from a good/services and taking opportunity to start a business
• An entrepreneur is an individual who sets up a business willing to take financial risks in hope of profit
• Roles of entrepreneur in business activity?

  Showing initiative-Spotting opportunity, reacting quickly

  Innovation- Developing new or improved products

  Organising resources-Get best out of employees; suppliers
• What are 2 characteristics of an entrepreneur?

  Determined to succeed

  Decision maker-Fast decisions and high efficiency to make sensible choices
• Entrepreneurs may be motivated financially, non-financially or for social; community reasons
• Financial motives of an entrepreneur include: To earn sufficient income to support lifestyle and earn profits greater than income working for someone else and being their own boss.
• Non-Financial motives of an entrepreneur include: To be your own boss, Personal satisfaction in accomplishment, Continue family business, earn living from a hobby
• Social and community motives of an entrepreneur: To provide employment for local residents and meet their needs / wants in providing goods/services unavailable.
• Social enterprises are businesses operating for community benefit, worker benefit or as a charity. They help the community.
• 2 Risks of being an entrepreneur?

  • Unstable income as their may be low sales due to competitors, Negative publicity or a time of recession in society
  • Unexpected cost increases of materials, wages, taxes in which if you have any fixed prices of a product/service business pays out more money decreasing profits
• 2 rewards of being an entrepreneur?

  Financial reward of higher income than working for someone else

  Personal satisfaction in being your own boss, building positive customer relationships; having a known brand
• A business plan sets out what the business does at present, its aims + objectives for the future and how they will be achieved. It may include marketing and financial information.
• 2 roles of a business plan for a start-up?

  • Decision making tool as it analyses important factors giving guidance on sensible decisions for survival.
  • To be able to seek finance and investment - venture capitalists, partners, banks would want to investigate financial state before raising finance
• What are 2 things included in a business plan?

  Business description such as type of ownership, name, What it sells/ provides

  Financial information such as cashflow and profit / loss accounts
• Banks want to see features of a business plan before providing loans to ensure your able to pay it back
• Business aims are long-term goals of a business
• Business objectives are targets set to meet business aims
• what are 3 things business aims may include?

  Survival - business to continue in long term providing income; legacy for family

  Market share - greatest percentage of sales in market to generate profit

  Growth - grow business overtime to increase market share and provide to more of target market, cater to more of market segment
• Business objectives help measure business performance
• What is SMART?

  Specific-Objective precise

  Measurable-Number

  Agreed-By all stakeholders, everyone involved

  Realistic-Possible to reach

  Timely-when is it reached
• Objectives vary on age, size, purpose of business