AC

EXTRA LESSONS BUSINESS

Added value - different between the selling price of a product and count of the raw materials used to make it

Increasing in the difference between the cost of purchasing bought materials and the price and the goods are sold

To add extra features to a product and the customer is willing to pay more after the value has be added

WAY OF ADDED VALUE

  1. Creating a brand( brands represent quality and some times status )

  2. Consumers are willing to pay more for products which have a strong brand attted to it for example why does of Nike selling better  then it puma ) because of its brand image. The difference is not that much

  3. Advertisements - through advertising the business can create a strong brand loyalty ( have relationships with our customers) if you create good loyalty you can charge more for good and services

  4. Providing customized services - business providing better personalized services to there consumers add more value. Consumers are willing to pay more customized services

  5. Provide additional features - a product or service with additional features or functionality can make the consumers pay extra. This very often seen in a car model. For example Toyota has 12 version of its innovation models the basic engine and built is the same but the price increases as additional features are added

  6. Offering convenience- consumer love convenience if you get a product or service without much  effort then you might pay a premium for it ( free home delivery of weekly groceries )

THE BENEFITS TO A BUSINESS OF ADDED VALUE

  • the business can charge more to its customers this leads to more profitability for the business in the long run

  • Through adde value the business can differentiate its self from its competitors. But added more value to the good and services a business can stand out among its competitors as product provideimg premium quality

  • A business can sever the cost of advertising and other promotional activities once it had created a prespertion of high quality and and brand loyalty among its customers. That added value helps cost cutting in the long run

BUSINESS ENVIRONMENT

the business is ever changing so it’s flexible to always change

The internal  external environment

Internal environment

  • the operating environment of the business

Elemels Of internet environment ( they are controllable )

1 .  Includes Same organization structure

  1. Leadership and ,management style

  2. Organizational resources

  3. Vision ( how does the looks like ok )

  4. Mission

  5. Organization culture ( looking at there believe )

External environment

Market and micro environment

  Challenges for this environment are not easy to control. And the environment is dynamic.. it’s elements keep on changing

ELEMENTS

  • physical environment

  • Global or international environment

  • Political environment

  • Economic environment

Business environment is ever changing which is dynamic and the businesses mush adaptive to the challenges and formulate strategies to copy with this challenges

WHAT A BUSINESS NEEDS TO SUCCEED

1 .  Labour is skilled or unskilled temporarily or permanent workers

2 the business land  required the side of builds renewable and non renewable goods resources to produce goods

  1. Capital the business needs money factors and machinery

  2. You need customers are agents which then purchases product made buy firms .

  3. Supplier the business will raw materials or other services form other businesses

  4. Government provide roads , foods , law and the business in one way or the other

WHY BUSINESS FAIL

1.poor planning, the business must set clear objectives aim full target that they seek to achieve

  1. Lack of experience

  2. Poor management new business owners  frequently lack business and management expertise such as finance , purchasing , selling production and hiring management employees

  3. Insufficient funds

  4. Poor location - a good business location may enable a struggling business to untimalety to survive and thrive and bad location would spoil disaster to even best management of enterprise

  5. Poor stock management- to much of cash being block also the stock brings in additional cost burned of matinging it and storage and if we keep stock in the warehouse… the risk of it getting damaged

Examples of we keep food stock for long of it will expire and it because a lost to the business

  1. Over investment in fixed  assiec like machinery these can’t be converted into cash

  2. Poor credit arrangement management - business might take to much of debt and might find if difficult to services them. Poor credit arrangement , forward planning and cash flow problems might contribute to it

  3. Personal use of business funds -owners  of small businesses usually don’t differentiate business funds and personal funds if

ROLES OF ENTREPRENEUR

is a person who is willing and able to create a new business idea or invention and that’s risks in perusing success

  1. Successful entrepreneur can identify and pursue opportunities, they create value for customers and build thriving businesses

  2. These individuals bring unique entrepreneurial sprint into the business which helps drive it forward and expand

  3. Entrepreneurs fulfill important roles in business which are organized resources including finance facilities people( employees) and equipment

  4. They make divisions at the starts and throughout the life of the business.

  5. Taking risks to maximize returns and maintain at a competitive advantage.

WHAT DO ENTREPRENEURS DO

  1. They gather and coordinate the resources necessary to start and operate a business

Example Michael dell his computer company in garage organizing resources such as computer, software tools and employees

  1. They take  financial personal professional or  conceptual risks

Example : an entrepreneur can invest Life savings or a quit Secure job and start there own business

  1. these risks can pay off with great rewards but the can also lead to failure and financial loss

INTRAPRENEUR

Is an individual task with creating or innovative products or processes within a already established business. Intrapreneurship evolves encouraging  employment to improve and think like entrepreneurs

  1. The Business encourages them to take risks , innovate and develop new ideas and projects that may benefit the business.

  1. Business can tap into the creative potential of there employees and generate new products or services or process that can drive growth and competitive advantage.

  2. This helps to create a culture that generates a sense of ownership and engagement of more of employees which includes motivation and helps to retain help talent

  3. To promote Intrapreneurs businesses may provide resources to employees or offer incentives or rewards to successful projects

  4. Intrapreneurs for filled important roles in businesses that complement those  of a entrepreneur. Innovative including resources in the most effective way developing new ideas and processes can identify new techniques.

  5. Organizing day to day decisions that drives a business forward  in pursuit in business owners to take calculated  cost and follow new parts

WHAT DO INTRAPRENURES DO

  1. They find the best use of existing resources identifying new ideas and techniques and implement innovative processes

Example: an intrapreneur can I tend to find a used to reduce waste  in the production process

  1. Intrapreneurs make on going decisions to ensure the business achieve its objectives

Example:

  1. They Pursue it  by convincing business owners to the develop and introduce new products,  enter new market, and implement know new ways working

Example : an intrapreneur may pursue a business owner to launch a new product in a new market

THE CHARACTERISTICS OF ENTREPRENEUR AND INTRAPURNEURS

Entrepreneur and  intrapreneur‘s require a require a unique set of characteristics and skills

  • commutation

  • Team-working

  • Problem solving

  • Organization

  • Information technology

characteristics

  • they must be creative

  • Hard working

  • Must be risk taker ( nothing   ventured nothing gained )

  • Entrepreneurs are innovators they usually identify the consumers needs and they are ever-changing

  • Entrepreneur‘s must be self confident

  • They must be dependable in the sense that they must be successful owners and must maintain a high standard

  • They must have positive attitude ( it helps them to be strong )

  • They must be resourceful

  • Optimism ( looking forward to a better future)

BARRIERS OF INTRAPRENEUR

  1. Make a decision to start up a business is rarely easy  They face a series of barriers that they must over come if they are a success of an enterprise

  • lack of finances ( they my not to able to invest there own money in a business)

  • Leander my be redundant to be able to approve loans due to the lack of a trading record

  • They may also be unaware of grants or other available financial support for new businesses

  • Lack of customers ( there is no guarantee that’s an unknown new business Will appeal to customers)

  • Failure to attract customers to but it’s products means that a business is unlikely to survive

  • Finding a sustainable location ( the best location are often to experience for new business) many entrepreneur run there business from their  own homes to minimize operating costs

  • Lack of opportunities ( entrepreneur need to have good idea that has the potential to generate a profit , they also need time , experience and sufficient eidence to support there decisions to take the risk in pursuing it )

  • Existing competition ( well known businesses that offer a similar product or service may already exist, competition is likely to have greater market knowledge and existing customer base as well as financial resources to invest in promotional activities )

RISK AND Uncertainties

Business Uncertainty’s is when a business can’t predict what is going to happen or Direct influence.

Factors that causes uncertainty

  1. Environmental factors such as Japanese tsunami March 2011

  2. Economic changes such as Covid lock down

  3. Collapses in the backing system

  4. The entry of new competitor

  5. changes in local and national legislation ( laws )

  6. Changes in the publical party government the country ( risks can measured allowing businesses owners to make informed decision before taking action. Research market inside and creating a business plan can help reduce risk

Entrepreneurs have barriers levels of risks they are willing to accept. Risks entrepreneur may prefer to start small and achieve slow growth . Entrepreneur may prefer to share risks with others in partnership or protect there personal aspects of forming a private limited company. Successful entrepreneur is can mange risk and quickly to unfraternity’s in the business environment.

BUSINESS , ENTERPRISE ABD THE DEVELOPMENT OF A COUNTY

Government policy also includes support to entrepreneurs to encourage them to set up new business or take steps to grow there business.

The government  recognizes the contribution  that small business make to the economy and offers a range of incentives to entrepreneurs in including

  1. Training programs to equip businesses owners with skills they need to operate an enterprise

  2. A streamlined an application process for low cost government low cost loans. Mentor invectives where entrepreneurs are partnered with expert who can provide advice on training and business development services

  3. Examination from income tax and minimum wage law for a limited period

HOW SMALL BUSINESSES CONTRIBUTE TO A COUNTRY ECONOMIC DEVELOPMENT

Roles of business enterprise development of the country

  1. Business enterprise providers employment

  2. They pay taxes ( they income taxes)

  3. Enterprise businesses increase the of the company the of domestic growth  products domestic Growth ( a measure of the total market value mangers value of financier total in a country at a given period time ( total market sales and how much we are obtained )

  4. The satisfy the needs and wants of the people

  5. They bring foreign currency if products sold the country ( reducing provety  levels )l

SOICAL ENTERPRISE

Is to a business with mainly social objectives that reinvest most of its profits in benefiting in society maximizing return to it owners. The primarily for social enterprise is the common goods( shared interest  sometimes is available and accessible to everyone in a society and benefits with in society

Ex : educational, roads, foods

They use the method and disciplined of business and the power of the marker place to advise there social environmental and human genders.

AIMS OF SOCIAL ENTERPRISE

  1. they operate for the world being for society

  2. Make profits is not main aim (the main aim is to solve social problems served by people) they aim at helping

  3. Profit is kept to provide more services ( they normally provide health and education) it generates income through trade

THE MAIN OBJECTIVES OF SOICAL ENTERPRISE

This aims are often referred to as the triple bottom line . This line is used to measure the preforms of a business.

  1. Economic ( profit that is economic)

  2. Social ( people)

  3. Environment ( planet ) to keep planet sustainable

BENEFITS OF SOICAL ENTERPRISE

  1. Social enterprise put high Social returns or investment other.  One hand there produces direct measurable public benefits

  1. Classical employment focus on Soical enterprise for example might services for public aims  Physical responsibility ( it reduces the margin cost of public support for people facing barriers by providing a pathway to economic self sufficient for those that are employed. Public safety makes the community in which of operates safer by disrupting cycles of proverrt trying. Incarcerations , chemical disaster, homeless safe

  1. Economic opportunity it improves our pool of human capital and create job in communities in economic renewal

  2. Social justice It gives a changes for those who are in need

BUSINESS STRUCTURES part 2

Economic sectors

  3 stages

Primary sectors

Secondary sectors

Tertiary sectors

Primary sector

The first stage of production all business which are related with a instruction of raw materials from Mother Nature such as mining , fishes , farming

Raw material that obstructed are then sent to the secondary factory with then deal with the processing or convertIng raw material into in to finishes good

Secondary sector

All businesses which manufacture and processes the raw materials which can be used by earn customers are known as secondary businesses. These include clothing , buildings ,  construction, computer Assembly , shoe factories

Tertiary sector

The one that provide provision of services take place to the  consumers

Transportation, banking , grocery store , education, show rooms , hotels

A business may exist in all three  sectors. For example the  British petroleum has its own oil well . It’s oil is a primary factor this oil is then  converted into petroleum and other buy products with is secondary and then after then processing oil into useable products, BT then sells it to the British consumers through it network of petroleum with falls under the tertiary

  1. Some business might have a 3 economic sectors but usually some businesses only have one sector that they mainly focus on

PRIVATE AND PUBLIC SECTORS

Business organizations

Are classified into two public sector business and private sector business

PRIVATE SECTOR

This factor comprises businesses owned and controlled but individuals or groups of individuals. Some businesses are  commonly found in the free market economy. There main aim is to make profit throughs the selling private goods

Example: one sold trader, two partnerships, 3 private limited companies, 4 public limited companies, 5 cooperatives

SOLD TRADER

A sold trader is a business owned and controlled by one person, it is a one man business

Formation:

( there is no legal formalities required ( so there are no laws… )

Ownership:

it’s owned by one person

Legal status :

the business is not recognized as a legal person it is referred as an unincorporated business . The business and the owners are two on separate  equities  meaning that business is is liable to its debt and then the owner is liable to its debt

Liability:

the owner suffers from unlimited liability if the business fails the owners lose personal  property

Continuity:

( there so no continuation if the owner dies ) meaning the business

Tax issue:

it doesn’t doesn’t pay corporate taxes but it pays income taxes on the profits made

ADVANTAGES  of SOLD TRADE

  1. It’s easy to form there less capital  investments and there’s no legal

  2. The owner has direct control of the business mean you can make decisions by yourself

  3. All profits goes to the owners

  4. The owners had personal contact with customers

  5. Also easy to quit the business

DISADVANTAGES

  1. Unlimited liability ( the owners is personal for all debt in the business and pay )

  2. Can raise lower capital investments ( they don’t have enough money to invest in the business)

  3. Limited management expertise ( they don’t know how to manage to business)

  4. Poor quality session making

  5. Difficult in attracting. Quality employees

  6. Lack of  continuing when the owner dies

PARTNERSHIP

Is when two or more but not more than 20 are will to start there own business

With shared capital investment and usually shared responsibility. To enter a partnership, partners can have a verbal agreement or ugliness

A partnership agreement includes:

1 . I’m out of capital contribution by each member

  1. Salaries are wages that are paid to each member

  2. Write an obligation of the partner

  3. Procedure for partnership is the solutions

  4. The name of firm ( the name of the business)

  5. Date of writing

  6. Duration of partnership

  7. The business to be done ( what exactly you will be doing in the business )

Formation :

there are fewer legal formalities

Onwership:

Owned by everyone in that business

Legal status:

Unincorporated ( meaning the business and the owners are not legal separate)

Liability:

They suffer from limited liability

Countuity :

When the key partner dies,  the business may come to an end

ADVANTAGE

1 . Is easy to form

  1. More capital is available

  2. Diversity of skills and expertise

  3. Decisions are made

  4. Personal contact with employees and customer

  5. Risk is spread over a number of people

  6. The develop from a government

DISADVANTAGE

  1. unlimited liability( all the owners assets are potentially at risk )

  2. Disagreements can to windings of the business

  3. All partners are responsible for the something of each other

  4. If the key partners dies the business may fail

  5. Profit on carrying the ratios necessarily equal

  6. The owner can taken over the and Partner will lose Control of the business

LIMITED COMPANIES

know as joint stock companies

These are business where a number of owners ( shareholders) poll in there resources together and share the profits  proportionately. The debt of the company are  separate of the debt of the owner

Ownership:

Can be easily transferred to and many of companies can be passed down many of these generations

Features:

  1. Separate legal entity

  2. Limit liability

  3. Owners are called shareholders ( buy shares)

  4. Shareholders receive. Dividend payments

  5. The board manger of  the company. The company doesn’t of  article of Association

  6. Shareholders hold annual general meeting ( a share is a cefefication  Concerning part ownerships of a company. This certificate is also  entitled Shareholders dividends . A shareholder is a person  who owns shares in a limited company

PRIVATE LIMITED COMPANIES

is small - medium sized business that is owned buy shareholders who are open members of a family business

These companies can not share sells to the general public they have 2 but not more than 50 shareholders. The business should submit Financial statements and put reports to the register of company.

Formation:

these are  complex legal formalities and two documents should be drafted by the founders of the company. These documents include Memorandum of Association and Articles of Association

Ownership:

2 to a maximum of 50 shareholders

Management in control:

It is managed by the board of directors

Legal status:

The business is recognized as a legal person

Liability:

The shareholders enjoy limited liability and if the business fails the shareholders personal asses Can’t be taken they only lose The capital they have invested in the business

Continuity :

the business continue

Taxes :

double fixation the shareholders pay tax on their income and the business pays corporate tax

ADVANTAGES

  1. easy to raise capital

  2. Shareholders has limited liability

  3. Greatest status then unicor  business

  4. Is it to transform to a public limited company ( change funds / status)

  5. do not have to publicize annual accounts press

DISADVANTAGE

  1. Not easy to form

  2. Have to fill complex tax forms

  3. Can’t raise capital through

PUBLIC LIMITED COMPANIES

Are large businesses with the right to sell  Shares to the general public. The shared price are something on the stock . They have alert 2 shareholders to a maximum limit . Shares  are easily transferred . The public can be invited to apprise the shares sometimes

Annual reposts are supposed to be public in the press they must keep a register for directors and investors shareholding

Formation :

They are more complex legal formality 3 document should be drafted by the owner of the company . The three documents include articles of association , memorandum of association , and the prospector

Ownership:

Owned by 2 or no maximum limit or numbers

Management in control:

By the board of Director

Legal status :

The business is recognized as a legal person and referred as incorporated business

Liability:

The shares holders enjoyed limited liability if the business fails the shareholders assets don’t be taken they only owe the capital that they have invest in the business

Continuity : there is continuing

Taxes issues: There is double taxation: shareholders pay tax on their dividends as well as the business paying corporation tax.

ADVANTAGE

  1. easy to raise capital through plotting shares just stock change

  2. Operate on a large scale

  3. Unlimited life

  4. employees can become shareholders including loyalty ,

  5. Shareholders enjoy limited liability

DISADVANTAGE

  1. Difficult to form

  2. Files open for the members of the public

  3. Decisions are hard to make due to the large size of the company

  4. No personal type of customer

  5. Conflict of interest

  6. Shareholders are usually interested in expanding in the business

CORPORATIVE

Associations of people United voluntarily to meet common economic Social and cultural . Usually members join together.  To purchase good they canT afford individual.

Main features:

  1. Formed by people who want to work together

  2. It is voluntary

  3. Member s make a fit-able  contributions

  4. Risk and benefits are shared equally

  5. They are democratically control

  6. The name ends with CO’OP

FORMATION : members have a common goal and these Members with draft a Constitution and the management formation is selected at the general meeting

ADVANTAGES

  1. IT IS EASY TO FORM ( any adult can form a corporate)

  2. No legal are formalities

  3. It’s open to everyone

  4. Members enjoy limited liability

  5. Members get good and services at reasonable prices

  6. There is continuity

  7. Government provide special assistance

  8. They are usually taxes exempted

DISADVANTAGE

  1. unable to raise large amount of financial resources

  2. It is managed by people who lack on required management skills

  3. Can be affected by conflict

Franchise

Are agreement where one party ( franchisor run another party which is the franchisees right to use if trade marks or trade names  as well as certain businesses suitable)

The franchisee sells the franchise product or service

Trades under the franchises trademark or trade name and benefits from the franchises help and support

In return The franchisees usually pays fee to the franchisor and the precent  of the sells revenue . The franchisees owes the outlet they run but the franchisor it keeps control over how products are marketed.

Well-known businesses that also franchises identify include

Butter , McDonald’s, chick inn, nandos , kfc

Contractual obligations :

  1. A franchise agreement can be drafted and signed by both parties. This is a legal contract in which the franchiser gives the  franchisees the right to us the business trade mark.

  2. The franchisor is not allowed to open a similar Business close by

  3. It must specify the franchisee in its monthly loyalty payments

  4. They agreement lays out details of what duties each party perform

  5. It also spreads  the duration of the franchise contact

Advantages to the franchisees

  1. Franchisees benefit from free open support( for example site selection and designing financing )

  2. Franchisor assist in training staff ( franchisee won’t have the cost to train because it is the franchisor duty)

  3. The franchisor advertisement on behalf of the franchisees ( saves money

  4. Risk is reduced and can be shared by the  franchiser

  5. Relationship with suppliers have already established

DISADVANTAGE

  1. The franchise might go out of business or change they way they do things

  2. The franchise agreement usually includes restrictions on how you run the business

  3. The franchisees must pay and initial Fee and continuing fee to continue to use the trademark

  4. Franchisees cannot sell goods to other suppliers

  5. Bridge of contract and results into a penalty charge

ADVANTAGES TO THE FRANCHISOR

  1. It is the source of income to the franchiser( loyalty)

  2. Risk of business is spread around different franchises

  3. A network of outlets gives the business a better support

DISADVANTAGE OF A FRANCHISOR

  1. Other franchises can give the brand a bad reputation

  2. The franchise or must provide franchisees and on going support with then requires Constant research

  3. Setting up a franchisees cost a lots of money

JOINT VENTURES

two or more business agree to work closely together on a particular project and create a separate business division to do so.

Joint venture is a long term business relationship but a short term relationship o a business single project.

The business is not a separate legal entity once the joint venture made it’s goal

Look for a example

They a joint  venture agreement such cover

  1. The parties goal

  2. The objectives of the joint venture

  3. Contribution made by its each party

  4. Its solution procedures

  5. How to joint venture is terminated

  6. No disclosure agreement

  7. Day to day management

ADVANTAGES

  1. Provide companies with opportunities to gain capacity and expertise

  2. companies to have access to new technology

  3. Access to better resources including personalized stuff and Technology

  4. Sharing risks with a convention partners

DISADVANTAGE

  1. The business fail of a partner will put the whole project at risk

  2. Tiles of management encounter but be different that the two won’t blend will together

  3. The parties don’t provide enough support in the early stages

  4. Errors and mistakes might lead to one blaming the other

Strategic alliances

In agreement between Two companies that have decided shared resources to start a project

Strategic alliances is less involved then a joint venture

The main purpose is to my allow to organizations, individuals or other entities to work together common goal

Example:

  1. An agreement with a local university

  2. agreement with the supplier