Business Unit 1.1

Business

An organization that uses resources to produce goods or services to meet customer needs and add value.

Goods

Tangible physical items capable of being stored, such as cars or games consoles.

Services

Intangible offerings that cannot be stored, provided to customers when needed, such as insurance or hairdressing.

Value Added

The difference between the cost of inputs and the value of outputs; features that differentiate a product from competitors.

Transformation Process

The process by which businesses take inputs (resources) and transform them into outputs (goods/services) that customers want to buy.

Inputs

The resources that are used in the production process, classified into financial, human, physical, and enterprise.

Financial Resources

Capital required for funding production, including cash, working capital, loans, and investments.

Human Resources

Employees and managers responsible for carrying out production tasks and overseeing operations.

Physical Resources

Materials, equipment, and premises used in the production process.

Enterprise

The business idea and willingness to take risks to turn it into a functioning business.

Primary Sector

The part of the economy concerned with the extraction of raw materials from land, sea, or air.

Secondary Sector

The part of the economy that processes raw materials into finished goods, such as manufacturing.

Tertiary Sector

The part of the economy that provides services to consumers and businesses.

Quaternary Sector

The part of the economy that focuses on knowledge-based services and information technology.

Entrepreneur

An individual who creates a new business or product and takes on financial risks to do so.

Intrapreneurship

The practice of encouraging entrepreneurial thinking and behavior within an existing organization.

Market Research

The process of gathering information about customer needs and market trends to inform business decisions.

Business Plan

A detailed document outlining business objectives, strategies, and the resources required to achieve them.

Legal Constraints

The legal requirements that must be met before starting a business, including compliance with local laws.

Crowdfunding

A method of raising funds for a project or business by soliciting contributions from a large number of people.

Operational Issues

Challenges related to the day-to-day management of a business's resources and processes.

Scaling

The process of managing growth in a business and expanding into new markets or product lines.