Business 1.1 - Enterprise & Entrepreneurship

What are the three main reasons that new business ideas come about?

• Changes in technology

• Changes in consumer demand (what customers want)

• Obsolescence (unneeded) of product and services (the iPod is now obsolete, because of the idea to just stream music on phones)

Why do new business ideas emerge from entrepreneurs?

Because good entrepreneurs and successful businesses recognise changes in the market, and develop solutions to meet dynamic (changing) customer needs.

How can changes in technology be a reason for why new business ideas come about?

Advances in technology can create new oppurtunities to develop innovative products and services e.g. the rise of phones and social media made oppurtunities for businesses to reach customers through apps.

How can changes in what consumers want be a reason for new business ideas to come about?

Consumer demand often changes overtime, so a business has opportunities to make new products and services → e.g. the growing demand for plant based food has lead to some companies making new products or services to satisfy customers.

How can products and services becoming obsolete be a reason that new business ideas come about?

Products and services can become outdated due to changes in technology or changes in consumer demand → This creates opportunities for businesses to develop new products and services to meet customer needs.e.g. CDs for movies became obsolete and we know use things like Netflix for movies.

What are the two reasons how new business ideas come about

• Original Ideas

• Adapting an existing product

What are original ideas?

New and unique concepts that are not based on existing products/services. They arise when entrepreneurs identify a gap in the market or a new need that hasn’t been met e.g. McDonald’s were the first to put toys and books into kids meals. This targeted young families, and increased customer attraction, leading to higher revenue.

What is adapting existing products and services?

This involves taking an existing concept and making it more suitable for a market and customers. It often means identifying a problem with an existing product or service and making a solution that solves it → Uber adapted the existing concept of taxi services and made a better solution by creating an app.

What are risks a business must manage?

• Business Failure → when a company stops operating because it cannot generate enough revenue (money from sales) to cover its costs (money spent making products) or achieve profitability (profit is revenue minus expenses)

• Financial Loss → when expenses exceed income or assets (resources businesses own) are damaged or lost, resulting in a reduction of money or value.

• Lack of Security → where a company is unprotected from risks like cyberattacks, physical theft, and operational disruptions, which can lead to financial loss, reputational damage, and failure to meet business goals.  

What are rewards a business must manage?

• Business Success → achieving consistent profitability and growth by providing desired products or services to a market, while also meeting broader goals like customer loyalty, brand recognition, and market reach (size of audience)

• Profit → leftover money a business has after subtracting all its costs and expenses from the total income it earned, representing the financial success and profitability of the company. 

• Independence → a company's freedom to operate, make decisions, and control its own operations without being controlled or influenced by external parties