business

factors of production.

the resources needed by a business to produce goods and services - land, labour, capital and enterprise.

Land

all the natural resources, including renewable and non-renewable, that can be obtained from the land or sea.

Labour

the skills and number of people who help provide goods and services.

Capital

the human-made resources and finances that are used to produce goods and services.

Enterprise

the ability and willingness to take risks to bring together and organise the other three factors of production to produce goods and services.

added value

the difference between the selling price and the cost of bought-in materials.

branding,improve quality, design,add convenience

how added value can be increased

opportunity cost

the next best alternative given up by choosing a different option.

primary sector

business activity that involves the extraction or harvesting of natural resources

secondary sector

businesses that turns raw material into manufactured goods

tertiary sector

involves providing services to consumers for businesses

private sectors

the part of the economy that is owned and controlled by individuals and companies for profit

public sectors

the part of the economy that is owned and controlled by the state or central government

business plan

a detailed written document outlining the aims and objectives of a business and what it intends to do too achieve them

risk taker, creative, determination, self-confidence, initiative, decisive

what are the characteristics of a successful entrepreneur

number of employees, capital employed, value of output or sales, volume of output or sales

ways to measure business size

increased profit, increase in market share, lower average cost, spread risk

why business owners might grow a business

merger

when two businesses agree to join to become a single, larger business

takeover

when one business buys a controlling interest in another  

horizontal integration

when two businesses at the same stage of production join to become a single, larger business

vertical integration

when two businesses at different stages of production whithin the same industry join to become a single business 

sole trader

a business that is owned and controlled by just one person

partnership

a business owned by two or more people

shareholder 

a person or organization who buys shares in a limited company which means they own part of the business

limited liability

owners of a company are only responsible for the debts of the business up to the amount they have invested in the company

private limited companies, public limited companies

what are the types of limited companies

private limited company

business that is owned by shareholders that can only sell its shares to family and friends.

public limited company

business that is owned by shareholders that can sell its shares to the general public

franchise

a business agreement where one person or business buys the right to use the name,  logo and products of an existing business

joint venture

two or more businesses agree to work together on a project and set up a separate business for this purpose

social enterprise

a business with social objectives that reinvests most of its profits back into the business or into benefiting society at large