1.1 ENTERPRISE & ENTREPRENEURSHIP

• why new business ideas are needed

  Businesses will need new ideas because of changes from:

  - technology

  - customer wants and needs

  - products/ service becoming obsolete
• how do new business ideas come about?

  ideas can be either new or adaptation of existing products/service

  
  

  new ideas come from:

  - solving problems

  - innovation ( a new idea that is usually adapted into already existing products )

  - invention ( creating something new )

  - accidental discovery
• changes in technology

  new tech often improve products & services

  - make products & services faster

  - make products smaller ( more compact )

  - make products & services cheaper

  - make products & services easier to use

  - make products safer
• changes in customers needs

  new business opportunities can occur because of new consumer wants & needs caused by:

  - changes in fashion

  - changes in economy

  - changes in lifestyle

  - changes in technology

  - changes in national demographics (population)
• obsolesence

  obsolete - no longer in use/ no longer useful

  
  

  new tech & changes in consumer wants and needs means that products and services can become obsolete
• invention vs innovation

  INVENTION - the creation of new products that did not previously exist

  INNOVATION - that adaptation of a product over time to improve its feature
• what is risk?

  risk - any situation which brings exposure to danger

  
  

  businesses face risks of:

  - business failure

  - financial loss

  - lack of security
• business failure, financial loss, lack of security


  BUSINESS FAILURE

  - a failing business is one that is unable to make sufficient profit or revenue to cover costs and survive

  - major cause of business failure is poor revenue and poor cash flow

  
  

  FINANCIAL LOSS

  - money is needed to set up and run a business, but there's the risk of losing this money if business does not make enough profit

  
  

  LACK OF SECURITY

  - entrepreneur often have to give up their existing jobs to pursue a business idea, along with the security of regular income and regular working hours
• what are the rewards?


  reward - the benefits that can be obtained by someone who puts in the effort required to run a business

  
  

  rewards include:

  - business success

  - profit

  - Independence
• business success, financial rewards, Independence

  PROFIT

  where revenue exceeds costs of a business, this money can be reinvested into the business, to help it survive and grow

  
  

  BUSINESS SUCCESS

  success brings a number of benefits to the owner:

  - positive reputation

  - personal satisfaction

  - winning business awards

  - becoming well-known businessman

  
  

  INDEPENDENCE

  entrepreneur may not want to work for someone else, they may want to:

  - make their own decisions

  - have control & flexibility over your working life
• what is a "good"?

  good - a tangible item that satisfies ones wants or needs.

  service - intangible activities that aid people over a period of time
• what is the role of market research?

  - to collect data/information on the business's target market to learn more about their wants and needs

  - so that the business can be more effective in meeting their wants and needs and market research can help spot gaps in the market
• what is the term added value mean


  added value - the extra value a business creates for a product by changes in its production

  
  

  more added value = increase in profit
• ways that businesses use to add value to their product/ service

  CONVENIENCE

  Saving customers time by making a product easier to obtain and use can result in customer being willing to pay more ( e.g. ready made foods )

  
  

  BRANDING

  a brand being popular or well-known can encourage customers to pay more for a product as they are more familiar with it or trusts the brand

  
  

  QUALITY

  Customers are usually prepared to pay more for higher-quality products

  
  

  DESIGN

  the features or looks and feels of a product

  
  

  UNIQUE SELLING POINT (USP)

  USP makes product/ services stand out from the competition resulting in customers being attracted to it
• What is a entrepreneur?

  a person who runs and owns a business, they are risk takers who have the mindset and the willingness and confidence to pursue business opportunities
• the role of an entrepreneur

  - organises resources of the business ( they often lack resources )

  - makes business decisions

  - takes risks