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1.1 Oxford textbook
What is a business?
A business aims to meet the needs and wants of individuals and organisations
Added value
changing inputs to create a desired output.
Resource Inputs
Human - the right quality (skills) and quantity of people required to make a product/provide a service.
Physical - the right quality/quantity of materials, machinery and land space to make/produce a product/service.
Financial - right amount of cash/financial resources to create a product/provide a service.
Enterprise - also known as entrepreneurship. The business idea and determination to turn an idea into a business.
Production processes
Capital Intensive
Labour Intensive
Product outputs
Goods and services
Business Functions
human resources, finance and accounts, marketing, operation management and productions.
Human resources
Ensure the right people are employed and properly paid.
Recruit people, train them or dismiss them.
Marketing
Ensure the business offers a product or service desired by a sufficient number of people in order to gain a profit.
Must appropriate strategies to promote, price, package and distribute the product/service.
Finance and accounts
Ensure appropriate funds are available to make the product/service.
Must forecast requirements, keep accurate records, ensure proper payment for goods and services needed to run the business.
Operations managements or production
Ensure appropriate resources are used to make the product/service.
Must control quantity/flow of stock, determine methods of production and ways to produce the good or service more efficiently.
What are the four sectors of production and a simple definition for each.
Primary sector - acquisition of raw materials
Secondary sector - processing raw materials, creating a product.
Tertiary sector - most service businesses
Quaternary sector - service that sells knowledge/info.
3 reasons for starting a business
Rewards - deciding your own wage.
Independence - being your own boss.
Necessity - can't find work.
Challenge - challenge themselves.
Interest - want to do it.
Finding a gap - nothing similar in the market.
Sharing an idea - find people with interests/share interests.
Business idea
The fundamental activity that the business will do
Process of starting a business
Organising the basics
Researching the market
Planning the business
Establishing legal requirements
Raising the finance
Testing the market
USP
unique selling proposition
5 reasons a new business might fail
Location was wrong
Structure of business didn't work
Supplies weren't reliable.
The research was done poorly
Sources weren't accurate
Not convincing
Goals were too vague
Registration was too difficult
Tax obligations were not fulfilled.
Start up wasn't raised enough
Accounts weren't kept properly
Pilot launch failed
Entrepreneur
An entrepreneur is a person who is willing to seize opportunities to start/run a business and is prepared to take risks in hopes of obtaining a profit.
Note
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