1.1 Enterprise and Entrepreneurship

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.