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Key Concepts (CESC):
Creativity
Ethics
Sustainability
Change
Creativity
The process of generating new ideas and considering existing ideas from new perspectives.
Ability to recognize the value of ideas when developing innovative responses to problems
Evident in the outcomes, products or solutions
Ethics
Refers to the moral principles that govern the behavior of a person or group of people.
Every business decision has moral implications.
The consequences of these implications can be significant for internal and external stakeholders and the natural environment.
Sustainability
Meeting the needs of the present without compromising the ability of future generations to meet their own needs.
Can be enhanced by conserving resources or finding more efficient ways to produce or discover new resources
Decisions need to consider TRIPLE BOTTOM LINE: people, planet, and profit
Change
Explored from several perspectives as businesses operate in a dynamic world that is continually subject to change.
Conversion, transformation, or movement from one form, state or value to another.
Due to increasing competition, new technologies, and markets as well as changing trends in consumer behavior, businesses need to adapt their objectives, strategies and operation in order to succeed.
Business
Any organization that uses resources to meet the needs of customers by providing a product or service they demand to earn profits
Entrepreneur
Someone who take the financial risk of starting and managing a new venture
Innovation
Providing either a different type of product or a service that is different from those of competitors, which is delivered in a distinct way.
Factors of Prodcution
Land
Labor
Capital
Enterprise
Land
Land and all the renewable and non-renewable resources of nature
Labor
Manual and skilled labor that makeup the workforce
Capital
The financial resources needed to setup and operate a business as well as man-made resources
Enterprise
Driving force of a business provided by risk-taking individuals known as entrepreneurs
Outputs of Business
The goods and services that satisfy a consumer's needs usually with the aim of making a profit
Classification of Goods or Services
Consumer Goods
Consumer Services
Capital Goods
Consumer Goods
The physical and tangible goods sold to final users; these include cars, food, and clothing. Non-durable consumer goods: can only be consumed or used once.
Consumer Services
Non-tangible products that are sold to final users; these include hotel accommodation, insurance services and train journeys
Capital Goods
Physical goods that are used by industry to aid in the production of other goods and services such as machines and commercial vehicles
Business Functions
Human Resource Management
Finance and Accounts
Marketing
Operations Management
Economic Sectors
Primary, Secondary, Tertiary, Quaternary
Primary
Firms engaged in farming, fishing, oil extraction, and all other industries that extract natural resources so that they can be used and processed by other firms
Secondary
Firms that manufacture and process products from natural resources, including furniture, brewing, baking, clothing and construction
Tertiary
Firms that provide services to consumers and other businesses such as retailing, transport, insurance, banking, hotels, tourism, and telecommunications
Quaternary
Information Technology (IT) businesses and information service providers such as research and development, business consulting and information gathering
Sectoral Change
The importance of each sector in a country's economic structure changes over time. The relative importance of each sector varies significantly between different economies. Measured by employment levels or output levels (GDP) as a proportion of the whole economy.
Entrepreneurship
Entrepreneurship the process of setting up a new business
Entrepreneur
Someone who take the financial risk of starting and managing a new venture
Opportunities of Entrepreneurship
Overcoming unemployment
Being independent
Improved standard of living
Do I have the appropriate personal qualities?
Innovation
Commitment and self-motivation
Self-belief
Risk-taking
Leadership skills
Is there a market for my product?
Where do ideas come from?
Own skills or hobbies
Previous employment experience
Conferences and exhibitions
Market research
Do I have sufficient capital?
Where does capital come from?
Personal savings
Friends and family
Banks
Venture capitalists and angel investors
Government grants
Where should I locate my business?
Need to minimize costs (home vs. new premises)
Business placement
How do I build a customer base?
Tailored product or service offerings
How do I compete effectively?
Better customer service
Must I keep accurate business records?
Vital to pay taxes, bills and chase up debtors
Do I have the necessary management skills?
Leadership
Cash handling and cash management
Planning and coordinating
Decision making
Communication
Marketing, promotion, and selling
How do I deal with change?
New competitors
Legal
Economic
Technological
Business Plan
A written document that describes a business, its objectives and its strategies, the market it is in, and its financial resources.
Contents of a Typical Business Plan
Executive summary
Description of business opportunity
Marketing and sales strategy
Management team and personnel
Operations
Financial forecasts
Sample Elements of the Business Plan
Name of business
Type of organization
Business owners
Business aim
Product
Price
Market aimed for
Market research
Human resources plan
Production details
Business Costs
Location of business
Main equipment required
Forecast profit
Cash flow forecast
Finance
Importance of Business Plans
Obtain finance for the start-up
Planning
Financial forecast
Users of Business Plans
Investors
Business Managers
Employees
Suppliers
Banks/Lenders
