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Dynamic nature of business
The idea that business is ever-changing because external factors, such as technology, are always changing.
demand
The number of units that customers want and can afford to buy.
obsolete
A product or service with sales that have declined or come to an end as customers find something new.
Entrepreneur
Business people who see opportunities and are willing to take risks in making them happen.
competitive advantage
A feature of a business that helps it to succeed against rivals
Adapting existing products
Finding new products based on the original one, such as Wall's White Chocolate Magnum
Why do new business ideas come about?
changes in technology
changes in what consumers want
products and services becoming obsolete
How do new business ideas come about?
original ideas
adapting existing products/ services/ ideas
Risk and Reward
The balance between the worst that can happen and the best that can happen
Business failure
The collapse of a business, probably leading to its closure.
Independence
The need by many business owners to make their own decisions and be their own boss.
Lack of security
Uncertainty for a business owner about day-to-day family income and assets
number of sole trader business in UK
3.3 million
number of limited companies in UK
1.6 million
number of partnership business in UK
0.45 million
Why do businesspeople need to take risks?
So that the business can grow.
What is the possible negative impact of taking risks on business?
Business Failure
Financial Loss
Lack of security
What are the rewards of taking risks for business?
Business Success
Profit and Wealth
Independence
What do successful business owners have to weigh up?
chances of business failure
costs/benefits of success or failure
the implications for the business as a whole
goods
Products that are manufactured or grown that consumers can buy and own.
customer needs
The products or services people need to make life comfortable
customer wants
What people choose to spend their money on, once the weekly bills have been paid
services
Doing work for other people rather than producing goods, for example running a shop.
percent of total GDP of UK that is services
79.6%
percent of total GDP of UK that is industry
19.7%
What should a producer do?
design packaging
get the right product range: big enough to be interesting but not so wide as to end up with too many small sellers
persuade shops to stock product(s)
make sure deliveries are on time + accurate
advertise
What is a business for?
goods and services
meeting customer needs and wants
How do you add value?
convenience and speed
good design
quality
brand name
USP
What does USP stand for and what does it mean?
Unique selling point. It is an original feature that rivals aren't offering.
Value Added
The difference between the selling price and the cost of bought in goods and services (the difference that creates the possibility of profit)
What does value added pay for?
distribution costs(shop rents, wages, bills)
administration(head office salaries)
taxation
dividends
profit reinvested into business
Branding
Giving a product or service 'personality', with a name and logo that makes it stand out
Name the roles of entrepreneurship.
taking risks
making business decisions
showing leadership
organising resources
Resources
things or people that can be used to help build and run the business.
