AQA GCSE Business 8132: Unit 3.1: Business in the Real World

megaset of the entire unit from the spec. there might be some duplicates that i didn't notice. cards are in no particular order, so i recommend shuffling.

Business

The organisation that produces goods or supplies services to meet customer needs and wants.

Purpose of business

To produce goods, supply services, distribute products, fulfil a business opportunity, or provide a good/service to benefit others.

Reasons for starting a business

To earn profit, be their own boss, pursue an interest, flexible hours, identify a gap in the market, dissatisfaction with current job, or help others.

Goods

Physical, tangible products that can be touched and owned (e.g. phones, clothes).

Services

Intangible actions performed for customers (e.g. haircuts, banking, teaching).

Needs

Essential items required for survival (e.g. food, water, clothing, shelter).

Wants

Non-essential items people desire to improve quality of life (e.g. holidays, designer clothes).

Factors of production

The resources used to produce goods and services: land, labour, capital, enterprise.

Land (factor of production)

Natural resources used in production (e.g. land, forests, minerals).

Labour (factor of production)

Human effort, skills, and work used in production.

Capital (factor of production)

Man-made resources used to produce goods/services (e.g. machines, tools).

Enterprise (factor of production)

The ability to bring other factors together and take risks to create a business.

Opportunity cost

The next best alternative that is given up when a choice is made.

Primary sector

Businesses involved in extracting raw materials from nature (e.g. farming, fishing, mining).

Secondary sector

Businesses that manufacture or build products using raw materials (e.g. car factories, construction).

Tertiary sector

Businesses providing services (e.g. retail, healthcare, finance).

Enterprise

The process of taking a business idea, organising resources, and taking risks to start a business.

Entrepreneur

An individual who sets up a business, takes risks, and organises resources to produce goods/services.

Characteristics of entrepreneurs

Hard-working, innovative, organised, decisive, risk-taking, determined.

Objectives of entrepreneurs

Be their own boss, earn more money, flexible hours, pursue an interest, fill a gap in the market, dissatisfaction with job.

Dynamic nature of business

Businesses must adapt to constant changes in technology, economic conditions, laws, and environmental expectations.

Impact of technological change

New technology can improve efficiency, reduce costs, change customer expectations, and create new markets.

Impact of economic change

Changes in interest rates, inflation, unemployment, and economic growth affecting business costs and sales.

Impact of legislation change

Laws affecting health and safety, consumer protection, equality, employment, and the environment.

Impact of environmental expectations

Pressure to reduce waste, cut carbon emissions, recycle, and act ethically.

Sole trader

A business owned and controlled by one person, with unlimited liability.

Advantages of sole traders

Easy to set up, full control, keep all profits, privacy of accounts.

Disadvantages of sole traders

Unlimited liability, limited capital, long hours, no continuity.

Partnership

A business owned by two or more people who share profits and responsibilities.

Advantages of partnerships

More capital, shared skills, shared workload, simple to start.

Disadvantages of partnerships

Unlimited liability, disagreements, profits shared, no continuity.

Private limited company (Ltd)

A company owned by shareholders, shares only sold privately, limited liability.

Advantages of Ltds

Limited liability, more capital, continuity, separate legal identity.

Disadvantages of Ltds

More regulation, shared control, must publish accounts, profits shared.

Public limited company (Plc)

A large company whose shares can be sold on the stock market; limited liability.

Advantages of Plcs

Very large capital potential, high status, continuity, limited liability.

Disadvantages of Plcs

Risk of takeover, expensive to set up, must disclose detailed accounts.

Not-for-profit organisation

An organisation that aims to benefit society rather than make profit.

Limited liability

Owners can only lose the money they invested; personal assets protected.

Unlimited liability

Owners are personally responsible for all debts; personal assets can be taken.

Choosing business legal structure

Depends on risk level, desired control, financial needs, and business size.

Business aims

Long-term goals a business wants to achieve.

Business objectives

Specific, measurable targets used to achieve business aims.

Purpose of objectives

To guide decisions, measure performance, motivate staff, and give direction.

Survival objective

Ensuring the business continues to operate, especially early on or during crises.

Profit maximisation

Making the highest possible profit.

Growth objective

Increasing size via sales, market share, employees, stores, or expansion.

Domestic growth

Growing within the home country.

International growth

Expanding into overseas markets.

Market share

The percentage of total market sales held by a business.

Customer satisfaction objective

Ensuring customers are happy with products/services.

Social objectives

Goals that benefit society (e.g. charity work, community support).

Ethical objectives

Aiming to act morally (e.g. fair trade, reducing pollution).

Shareholder value

Increasing dividends and share price for shareholders.

Why objectives differ

Depends on size, competition, type of business, and stage of growth.

Changing objectives

Objectives change as businesses grow or respond to external factors.

Measuring business success

Includes profit, market share, satisfaction, retention, reputation, and social impact.

Stakeholder

Anyone with an interest in a business.

Internal stakeholders

Owners, managers, and employees within the business.

External stakeholders

Customers, suppliers, local community, government.

Owners' objectives

High profits, business growth, increased value.

Employees' objectives

High pay, job security, good conditions, opportunities for promotion.

Customers' objectives

High quality products, fair prices, good service, reliability.

Suppliers' objectives

Regular orders, prompt payment, long-term relationship.

Local community objectives

Low noise/pollution, job creation, responsible behaviour.

Government objectives

Legal compliance, tax revenue, employment, economic growth.

Impact of business on stakeholders

Businesses affect jobs, environment, prices, community, and supplier incomes.

Influence of stakeholders

Through buying choices, strikes, media, complaints, protests, or legal pressure.

Stakeholder conflict

Conflicting interests between groups (e.g. higher wages vs lower costs).

Factors influencing location

Proximity to market, raw materials, labour, competitors, and costs.

Proximity to market

Being close to customers to maximise sales.

Proximity to raw materials

Important for heavy or bulky materials to reduce transport costs.

Availability of labour

Areas with skilled, affordable workers attract businesses.

Proximity to competitors

Some avoid rivals; others cluster to attract customers.

Location costs

Includes rent, business rates, utilities, and transport.

Infrastructure

Transport links, communication systems, and utilities supporting business activity.

Business plan

A document outlining business objectives, strategies, operations, and financial forecasts.

Purpose of a business plan

To raise finance, reduce risk, set objectives, plan resources, and organise functions.

Main sections of a business plan

Idea, aims, market research, marketing plan, operations, HR plan, finance forecasts.

Benefits of a business plan

Better decision-making, clearer direction, easier to secure funding, reduced risk.

Drawbacks of business plans

Time-consuming, may become outdated, does not guarantee success.

Fixed costs

Costs that do not change with output (e.g. rent, salaries).

Variable costs

Costs that change with output (e.g. raw materials).

Total costs

Fixed costs + variable costs.

Revenue

Income from sales (price × quantity sold).

Profit

Revenue − total costs.

Loss

When total costs exceed revenue.

Organic growth

Growing internally by increasing output, opening stores, franchising, or online expansion.

External growth

Growth through mergers or takeovers.

Franchising

Giving others the right to trade under the business name for fees/royalties.

Opening new stores

Expanding physical presence to increase sales.

E-commerce expansion

Growing by selling products online.

Outsourcing

Hiring another business to carry out tasks (e.g. manufacturing or customer service).

Merger

Two businesses agree to join and form a single business.

Takeover

One business buys another and gains control.

Economies of scale

Cost advantages gained when output increases, reducing average cost per unit.

Purchasing economies of scale

Buying in bulk leading to lower unit costs.

Technical economies of scale

Using better machinery or technology to improve efficiency.

Diseconomies of scale

Rising average costs due to growing too large.

Causes of diseconomies

Poor communication, complex structure, low motivation, slow decisions.