business paper 1 wjec eduqas a level

What is meant by enterprise in business?

Enterprise refers to the willingness and ability to take risks and start new businesses or ventures, usually to make a profit. Also another name for a business

What is an SME?

An SME is a Small or Medium-sized Enterprise, typically defined by its number of employees (fewer than 250) and turnover (less than £50 million).

How can satisfying needs and wants create business opportunities?

Entrepreneurs identify gaps in the market where needs and wants aren't being met and create products/services to fill those gaps, generating business opportunities.

What are some ways entrepreneurs can identify business opportunities?

By conducting market research, spotting trends, solving problems, identifying gaps in the market, or improving existing products/services.

What is the role of an entrepreneur in business?

Entrepreneurs create, set up, run, and develop a business, taking on risk and responsibility for its success.

What are financial motives for entrepreneurs?

Profit, wealth creation, financial independence, and return on investment.

What are non-financial motives for entrepreneurs?

Personal satisfaction, independence, social goals, challenge, passion for an idea.

What characteristics are typical of successful entrepreneurs?

Creativity, risk-taking, resilience, determination, confidence, leadership.

What skills are important for entrepreneurs?

Communication, decision-making, problem-solving, numeracy, organisation, negotiation.

Why are entrepreneurs and SMEs important to the UK economy?

They contribute to job creation, innovation, competition, and economic growth across all sectors—primary, secondary, and tertiary.

What is the impact of entrepreneurs and SMEs on the economy?

They drive innovation, diversify the economy, increase employment, and respond quickly to market changes.

Who are stakeholders in a business?

Individuals or groups affected by a business, such as owners, employees, customers, suppliers, local community, government.

What is the purpose of a business plan?

To outline the business's goals, strategies, financial forecasts, and operations; it helps secure finance and guide business development.

What are the main components of a business plan?

Executive summary, business description, market analysis, marketing strategy, operational plan, financial forecasts.

Why is a business plan important?

It helps assess feasibility, attract investors, secure loans, monitor progress, and manage risks.

What sources of support are available to entrepreneurs?

Government agencies, business mentors, banks, online resources, professional advisors, business incubators.

What is a market in business terms?

A place or process where buyers and sellers interact to exchange goods or services.

What is competition in a market?

The rivalry among businesses to attract customers and achieve goals like profit and market share.

What are the different types of markets?

Local/global, mass/niche, trade/consumer, product/service, seasonal markets.

What is market size?

The total sales volume or value of a particular market over a period of time.

What is market share?

The percentage of total market sales controlled by one business.

What are market trends?

Patterns or tendencies in how a market behaves, such as growth, decline, or change in customer preferences.

What is market segmentation?

Dividing a market into distinct groups of customers with similar needs or characteristics.

How are markets segmented?

By demographics (age, gender), geography, lifestyle, income, behavior, etc.

Why is segmentation important?

It allows businesses to target their products more effectively and meet customer needs more accurately.

What are the degrees of competition in markets?

Ranges from perfect competition (many firms, identical products) to monopoly (one firm dominates).

What are the features of perfect competition?

Many firms, identical products, no barriers to entry, price-takers.

What are the features of monopolistic competition?

Many firms, slightly differentiated products, some pricing power, low barriers to entry.

What are the features of an oligopoly?

Few dominant firms, significant barriers to entry, interdependence between firms.

What are the features of a monopoly?

One firm dominates, high barriers to entry, price-setter.

Why do consumers need protection from businesses?

To prevent exploitation, unfair practices, false advertising, and ensure safety and fairness.

What is demand?

The quantity of a product consumers are willing and able to buy at a given price.

What is supply?

The quantity of a product that producers are willing and able to sell at a given price.

What is equilibrium in a market?

The point where demand equals supply—market-clearing price and quantity.

Why is demand and supply important in a market?

They determine the price and quantity of goods/services exchanged, influencing business decisions and resource allocation.

What factors cause a change in demand?

Changes in income, tastes and preferences, price of substitutes/complements, advertising, demographics, expectations.

What factors cause a change in supply?

Changes in production costs, technology, number of suppliers, taxes/subsidies, weather (for agriculture), expectations.

How does a change in demand affect price and quantity?

Increased demand typically raises price and quantity; decreased demand lowers both, all else being equal

How does a change in supply affect price and quantity?

Increased supply tends to lower price and increase quantity; reduced supply raises price and reduces quantity.

What does a demand curve show?

The relationship between price and the quantity of a good consumers are willing to buy, usually downward-sloping.

What does a supply curve show?

The relationship between price and the quantity of a good that producers are willing to sell, usually upward-sloping.

What causes the demand curve to shift?

Non-price factors like changes in income, preferences, or population.

What causes the supply curve to shift?

Non-price factors like changes in production costs, technology, or regulation.

What is the impact of a demand or supply shift on equilibrium?

It changes the market-clearing price and quantity, resulting in a new equilibrium point.

What is price elasticity of demand (PED)?

A measure of how sensitive demand is to a change in price.

What is income elasticity of demand (YED)?

A measure of how demand changes in response to changes in consumer income.

What are inferior goods?

Goods for which demand decreases as income rises (e.g. instant noodles). -0 or less YED value

What are normal goods?

Goods for which demand increases as income rises. +YED

What are luxury goods?

A type of normal good with a high income elasticity—demand rises more than proportionately as income increases. +1 YED or more

What is market research?

The process of collecting and analyzing data about customers, competitors, and the market to inform business decisions.

Why is market research valuable?

It helps businesses understand customer needs, identify opportunities, reduce risks, and support strategic decisions.

What is primary research?

First-hand data collected directly from the source, e.g., surveys, interviews, focus groups.

What is secondary research?

Data previously collected for another purpose, e.g., government reports, industry publications, internet sources.

What is qualitative data?

Non-numerical insights such as opinions, feelings, or motivations (e.g. from interviews).

What is quantitative data?

Numerical information that can be measured and analyzed statistically (e.g. survey percentages).

What are examples of primary research methods?

Surveys, interviews, focus groups, observations, test marketing.

What are examples of secondary research methods?

Internet research, market reports, government statistics, trade publications.

What factors influence the choice of market research method?

Budget, time, purpose of research, target audience, type of data required.

What are the advantages of primary research?

Specific to business needs, up-to-date, greater control over data collection.

What are the disadvantages of primary research?

Time-consuming, costly, requires expertise to conduct and interpret.

What are the advantages of secondary research?

Quick, inexpensive, accessible.

What are the disadvantages of secondary research?

May be outdated, not tailored to specific business needs, may lack credibility.

What is sampling in market research?

Collecting data from a subset of the population to represent the whole.

What is random sampling?

A method where everyone in the population has an equal chance of being selected.

What is quota sampling?

A method where researchers choose participants to reflect certain characteristics of the population.

Why is avoiding bias in research important?

Bias distorts results and can lead to poor business decisions.

How useful is sampling to businesses and stakeholders?

It saves time and money while still providing valuable insights if done properly.

What is the difference between the private and public sector?

The private sector is owned by individuals or companies aiming for profit, while the public sector is owned and funded by the government to provide public services.

What are typical aims of private sector businesses?

Survival, growth, profit maximization, market share, customer satisfaction.

What are the aims of the public sector?

To provide essential goods and services, promote welfare, ensure access and equity.

How do the public and private sectors differ in providing goods and services?

Public sector focuses on accessibility and need; private sector focuses on profitability and efficiency.

What are the legal structures of private sector businesses?

Sole trader, partnership, private limited company (Ltd), public limited company (plc).

What is unlimited liability?

When business owners are personally responsible for all debts of the business (e.g., sole traders, partnerships).

What is limited liability?

Owners' financial responsibility is limited to their investment in the business (e.g., Ltds, plcs).

What are advantages of a sole trader?

Simple to set up, owner keeps all profits, full control.

What are disadvantages of a sole trader?

Unlimited liability, limited capital, responsibility falls on one person.

What factors affect the choice of legal structure?

Size of the business, need for capital, level of risk, tax implications, control preferences.

What are not-for-profit organisations?

: Businesses that reinvest surplus for social or community goals, not personal profit.

Examples of not-for-profits?

Charities, social enterprises, co-ope#ratives, societies.

Why is legal structure important for stakeholders?

It affects liability, control, transparency, and how profits are distributed.

What factors affect business location decisions?

Cost, proximity to market/customers, transport links, access to labor, availability of raw materials, competitors.

How does location relate to business needs?

Location should support target market access, reduce costs, attract skilled staff, and enable efficiency.

How can location choices be evaluated?

By comparing how well each option meets strategic and operational goals, costs, and long-term growth potential.

What are common sources of finance for entrepreneurs and SMEs?

Personal savings, loans, overdrafts, venture capital, trade credit, grants, retained profit, crowdfunding.

What are advantages of personal savings?

No interest or repayment obligations, full control.

What are disadvantages of personal savings?

Limited amount available, personal financial risk.

What are pros and cons of bank loans?

Pros: fixed terms, large sums. Cons: interest, collateral may be needed.

How should businesses evaluate finance options?

Based on cost, risk, control implications, repayment terms, availability.

What is revenue?

The total income a business earns from selling its goods/services .Formula: Revenue = Price × Quantity Sold

What are costs in business?

Expenses incurred in producing goods/services.

What are fixed costs?

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

What are variable costs?

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

What are semi-variable costs?

Costs with both fixed and variable elements (e.g. utility bills with base fees plus usage).

What are direct costs?

Costs directly tied to producing a good (e.g. materials).

What are indirect/overhead costs?

General business expenses (e.g. admin, rent).

What is profit?

The surplus after all costs are subtracted from revenue.Formula: Profit = Revenue - Total Costs

What is contribution?

The amount each unit contributes toward fixed costs and profit.

Formula: Contribution = Selling Price - Variable Cost per Unit

What is break-even?

The point at which total revenue equals total costs—no profit or loss.

How is break-even calculated?

Break-even Output = Fixed Costs ÷ Contribution per Unit

What is a break-even chart?

A graphical representation of costs, revenue, and break-even point.