NEW 1.1 Enterprise and entrerpreneurship

Obsolete

When a product is outdated and no longer desired by consumers.

Goods vs services

Goods are a physical product, services are a task or action performed for you.

A business idea is good if it’s:

• Solving a problem

• A cheaper or better way of doing something

• Can be developed, tested and brought to market quickly

• Clearly focused on the needs of the target customer

• Anticipating a change in the market

External challenges a business has to face are:

• Legislation: sugar tax, minimum wage, health and safety laws etc.

• Environmental: focus on sustainability e.g. paper straws etc.

• Economic: interest rates, inflation etc.

• Technological: AI, apps, websites, automation etc.

• Social: change in customers work patterns, lifestyles, and social awareness

New ideas for businesses:

• Original ideas

• Adapting existing products

• Business experience/personal experience: better understanding of what customers want, less need for market research, entrepreneur able to make more realistic assumptions about sales, costs etc.

• Observation - gap in the market

Risk

The chance of loss or damage

Starting your own business means risking:

• Leaving a secure job

• Investing a lot of money

• More stress in running the business.

A business can fail due to:

• Poor management

• Poor market research

• Poor quality products

• Selling less than expected

• Start-up costs being too high

• Unexpected shocks

An entrepreneur can reduce the risks they take by:

• Planning

• Researching

• Being cautious

• Taking calculated risks

• Keeping costs down

• Monitoring and reviewing business performance

Reward

A benefit that is achieved by a business owner

Starting your own business can result in:

• Profit

• Self-esteem

• Independence: you are your own boss, get to make your own decisions, higher degree of control over the business

• Satisfaction

• Capital gains (money made by selling part of, or the whole business)

Adding value

The difference between the selling price of a product and the cost of making it

A business can add value through:

• Strong branding: reputation for quality, value etc.

• A high-quality product

• A unique selling point

• Excellent customer service or convenience - customers may pay more to get a prodcut right away

• Adding features and benefits that customers want

• A well designed product & variety of designs

Enterprise

A business, and the actions of people who run a business

Entrepreneur

someone who takes a calculated risk through starting a business

What makes a good entrepreneur?

• Innovative

• Risk-taker

• Hard-working

• organised

• persuasive

• leadership skills

• lucky

Consumer

The person who uses the product.

Customer

The person who buys the product.

Dynamic business

Businesses responding to what consumers want.

Unique selling point

A characteristic of the product that makes it different from other similar products being sold in the market.

Why do products become obsolete?

Obsolete products are usually replaced by newer or better ways of doing things. This can come from changes in technology & new customer wants (organic, free range, sustainable etc.)