Literally every single Business thing to ever exist for GCSE

Good

Physical product, such as a car

service

an intangible product or action

Consumer

Someone who uses goods and services produced by other businesses

Reasons for starting a business

- Own boss vibe

- Want all the PROFIT (greedy)

-Need a job DUHH

- Unsatisfied with current job

-Want flexible working hours

-Provide a service for others

-Produce goods

- Supply services

- Fulfil a business opportunity

Factors of production

- Land

-labour

-Capital

- Enterprise

Capital

Man-made resources like machinery, tools, buildings, technology, and the money needed to buy them.

enterprise

The person who combines the other factors, takes risks, and develops the business idea to make a profit.

Land

Any natural resource used in production

Recourses

Are the inputs that businesses use to provide their goods or services

Enterprise

a business organization in an area

opportunity cost

Cost of the next best alternative

Primary sector

the part of the economy that draws raw materials from the natural environment

Examples of primary sector

fishing, mining, agriculture, fracking, foresty

Secondary sector

manufacturing

Examples of secondary sector

Car manufacture, House building, Food processing

Tertiary sector

the part of the economy that involves services rather than goods

Examples of tertiary sector

Hairdressing, banking, tourism, schools, dentist

Interest

Is the money paid by banks as a reward to attract people to save with them

Characteristics of entrepreneurs

- Innovative

- Risk takers

- Hard working and determined

- Organised

Why do business face constantly changing business environments?

changes in:

- technology

- economic situation

- legislation

- environmental expectations

Interest rates

Refer to the cost of borrowing money or the reward for saving money, expressed as a percentage

Inflation

Refers to the rate at which prices are increasing.

Gross domestic product

Measures all the income earned in a country's economy in a year

Sole trader

Someone who sets up in businesses on his/her own

Advantages of being sole trader

- Quick and easy to set up

- Make all decisions for yourself

- Keep all profits yourself

Disadvantages of sole trader

-Stressful

-UNLIMITED LIABILITY (gASP)

- LOTS OF WORK

-If you die, the business dies.

- Hard to raise moneyyyyy

- Smol business, so HIGH costs and LOW profits

Unlimited liability

The personal possessions IF the owner a business are at risk if there are any problems.

Partnership

Occurs when two or more people join together in a business enterprise to pursue profit

Deed of partnership

An agreement between partners that sets out the rules of the partnership, such as how profits will be divided and how the partnership will be valued if someone wants to leave

Advantages of Partnership

- Sharing workload (sharing is caringggg)

- More sources of finance than sole trader

-Share skillsssss

Disadvantages of partnerships

- May disagree with the other partners

- Unlimited liability (gASP)

- Liable for the ACTIONS of the other partners

-Sharing profits (sharing is caring)

Company

A business that has its own legal identity

Shareholders

A person or an organisation that owns a part of a company

Advantages of a company

-Limited Liability

-Better status in the eyes of some customers

-Continues after the death of the founders (deep)

-Can bring in investors

disadvantages of a company

- Have to register

- Have to disclose information on sales and profits

- Have to have accounts independently checked

- If there are other investors the original founder is not in full control of the business

STOCK EXCHANGE

a market for buying and selling stock

FLOTATION

When a private limited company becomes a PUBLIC limited company

Private limited company

A business owned by shareholders with limited liability but whose shares cannot be bought by or sold to the general public.

Advantages of private limited company

- LIMITED LIABILITY

- MORE STATUSSSS

- if founders die, company still EXISTSSSS (legends never die)

Disadvantage of private limited company

- Legal procedures (ugh)

- Business's financial accounts must be available to PUBLIC

- Accounts must be checked by an independent accountant, so COSTS

- CORPORATION TAX

- Investors will become STAKEHOLDERS.

Public limited company

A public limited company is one that has shares that are sold to the general public

Advantages of public limited companies

- Advertise shares to general public

- ATTRACT MORE MEDIAAAAA

- more STATUS

- Investors want shares. they will buy shares.

Disadvantages of public limited company

- Bad media coverage (za GOSSIP)

- TAKEOVER RISK!!!

- More regulated to law (boo.)

- Outside investors may not agree with how things are run.

Not-for-profit organisation

Set up to achieve objectives other than profit

Aim

General goal of a business

Objective

Specific target that is set for a business to achieve

Why set objectives?

- HELPS WITH DECISION MAKING

- Understand the direction in which the business is heading to investors

-Provides targets to measure SUCCESS

- Motivate ppl

Role of objectives

- Survival

- Earning a profit

- Shareholder value

- Customer satisfaction

- Market share

- Growth

- Being ethical

- Environmental targets

Why would objectives be different between businesses?

Depends on:

- size of business

- level of competition faced

- type of business

Why do objectives need to evolve?

Objectives from larger more established business will differ from smaller start-up business

- becoming the dominant business in the market

- international expansion

- increasing shareholder value

- ethical and environmental considerations

Private sector organisations

Owned by individuals

Public sector organisations

Owned by the government

Dividens

Financial rewards paid out to shareholders each year

Objective of skateholders

- Employees want to just have a secure job and get earnings bro

- Owners/shareholders want more DIVIDENS and share price

- The loco locals want loco local jobs and less environmental impact

- Government wants LEGAL behaviour, wants TAXES, wants GROWTH

- Customers want good info, good service, good value for money

Negotiation

Occurs when two sides discuss what they want and try to reach a solution

Stakeholders influence

- NEGOTIATION

- direct action!

- Refusal to compromise

- VOTES

Factors involving location

- Type of business

- Proximity of the market

- Competitors

- Availability of raw materials

- Availability and cost of labour

- Transport links

- Technology

- Costs

Advantages of locating OVERSEASSS

- cheaper labour

- Access to rare recourse

- Financial incentive from foreign government

- avoids protectionist measures from governments

- Market is growinggggg fast

Disadvantages of locating OVERSEASSS

- May be different rules and regulations

- Customers may have different tastes

Imports

Goods and services that are purchased from overseas by consumers of businesses

Quota

Limit on the number of foreign goods imported into a country

Protectionist measures

Policies that governments use to protect their own businesses against foreign competition

Business plan

A document setting out what a business does and what it hopes to achieve in the future

Business planning

The process of producing a business plan

Purpose of business plan

- Helps sets up a business successfully

- raise finances to show investors

-set objectives

-co-ordinate actions

problems of business planning

-uncertainty,

- lack of experience,

- change

Uncertainty (OoOooh)

Occurs when there is a LACK of information about a situation. This means the outcome of consequences are very DIFFICULT to predict

Risk

The {POSSIBILITY} of something going wrong

What's inside a business plan?

- Background info on founders/investors

- Firm's objectives

-details of price it will set

- revenue

-how to compete against RIVALS.

- Financial position, forecasting.

Main sections of business plan

1 Executive summary

2 The product/service

3 The market

4 Marketing plan

5 Operational plan

6 Financial plan

7 Conclusion

R E V E N U E

The income that a firm receives from selling its goods/services. Lowkey also referred to as 'turnover'.

TOTAL costs

Fixed costs + variable costs

FIXED costs

Those pesky costs that don't change when a business changes its output >:(

VARIABLE costs

'those' costs that vary directly with the business's level of output

Internal growth

Occurs when a business gets BIGGER by selling more of it's products

External growth

Occurs when a business gets BIGGER by joining or buying other businesses (rude)

Methods of growth

mergers

takeovers

franchising

Market capitalisation

market price of a share x the number of shares

Franchises

Occurs when a franchisor (sounds French) sells the rights to its products to a franchisee; usually in return for a fee and a percentage of turnover

Franchisee

Buys a franchise usually in return for a fee and percentage of turnover

Franchisor

Sells a franchise usually in return for a fee and percentage of turnover

Advantages of selling a franchise

- Can grow quickly

- Franchisee provides some of the finance

- Franchisee motivated as they are running their own lil mini you

Disadvantages of selling a franchise

- lose some control

- danger of problems with one franchisee affecting the whole brand

- have to share profits (EWW)

Advantages of buying a franchise

- Established brand (fancy)

- Access to training and supplies

- Share marketing costs

- Learn from other franchisees

Disadvantages of buying a franchise

- Have to share profits :(

-May have to work within franchisor's guidelines. (ugh)

- Have to contribute to group marketing

- Sales may suffer if another franchisee gets a bad reputation :0

Outsourcing

when a business uses another business to produce for it

Merger

When two or more businesses join together to form a new business

Advantages of merging

Reduced duplication of services

Higher levels of efficiency

Lower administration and management costs

The ability to offer more services

Attraction of more staff to larger institutions

Disadvantages of merging

- Governance of the corporation is with one person, which eliminates the checks and balances process that the board was created for in the first place

- Independence of the board is compromised, and the power of the stockholders is minimized

Advantages of a takeover

- economies of scale

- increased profits

- access to new markets

Disadvantage of a business takeover

- Huge cost

- employee demotivation

- Diseconomies of scale

Economies of scale

Occurs when a business unit costs of production fall as its output rises and the business expands

Diseconomies of scale

Occur when the cost per unit increases as a business expands

Why did the electrician close business once a week?

Because business was light.

ICT

The computing and communications systems that a business might use to exchange information with stakeholders

Positive impacts of changing use of ICT

- Increased Efficiency and Automation

- Enhanced Communication and Collaboration

- Global Market Reach

- Data-Driven Decision Making

- Cost Reduction

- Innovation and New Business Models

Negative impacts of changing use of ICT

- Cybersecurity Risks

- Initial Cost and Maintenance

- Job Displacement

- Information Overload and Loss of Personal Touch

- Over-reliance on Technology:

Examples of digital communication

cell phone calls, texts, instant/direct messages, emails, online posts, FaceTime, Skype, etc.

Stakeholders

the individuals or groups that have an interest in a business

E-commerce

The act of buying or selling a product using an electronic system such as the -internet-