Studied by 2 people
Business
A decision making organisation involved in the process of using inputs to produce goods and/or services.
The organised effort of individuals to produce and sell, usually for a profit, goods / services to satisfy individuals needs/wants
Goods
vs
Services
Physical Products
vs
Intangible products
The Production Process
Inputs → Processing → Outputs
Factors of production (CELL)
Capital
Entrepreneurship
Land
Labor
Needs
vs
Wants
The basic necessities an individual must have in order to survive.
vs
Things people desire, that add comfort to their life.
Added value
Positive difference between selling price & cost of production.
Other functions of a Business
Provide employment & disposable income
Improve quality of life
Profit & Wealth creation
More choice for consumers
Opportunity for entrepreneurship & innovation
Customer
vs
Consumer
Individuals or organisations that buy a product
vs
Individuals or organisations that use a product
Entrepreneur
The individual who plans, organises and manages a business and its operations, taking on the risks involved in doing so
Entrepreneurship
The collective knowledge, skills and experiences of entrepreneurs.
Intrapreneur
An employee of a business who is encouraged to innovate and take risks in order to improve a product or service
Human Resources
The function of an organisation responsible for handling all matters relating to the workforce/ all personnel of the organisation.
Finance and Accounts
The function of a business responsible for handling its money, ensuring it has enough funds to conduct its daily business operations and ensuring compliance with legal requirements.
Marketing
The function of a business responsible for identifying needs and wants of customers so the business can satisfy them.
Operations
The function of a business responsible for the processes involved in producing goods and services using the resources available to the business.
Primary Sector
Refers to businesses Involved in the cultivation and extraction of natural resources
Secondary Sector
Refers to businesses involved in the manufacturing and processing raw materials into products.
Tertiary sector
Refers to businesses involved in the delivery of services
Quaternary Sector
Refers to businesses involved in the development and use of information and data.
Reasons for starting a business
To fill a hole in the market
Financial reward
Control
Innovation
Passion to make change
New Business Idea
Challenges of starting a business
Lack of funds
Small competition
Market is too small (lack of potential customers)
Poor management skills
Unskilled employees
Environmental, political or economic shocks
Steps to start a business
Refine the idea
Make a business plan
Decide on legal structure
Register the business
Find a suitable location
Hire employees
Get funding
Elements of a business plan
The business Idea
how the business will be organised
the functions of the business (marketing, HR ect)
Note
Flashcard