Zusammenfassung der Ressource
BUSS1
- Enterprise/Entrepreneur
- Enterprise: The
willingness and
ability to think of a
new business idea &
taking the risks
involved
- Entrepreneur: Someone who starts
and runs a business & takes the
responsibility for risks involved.
- Risks include:
Land/Natural Resources,
Labour, Capital, Enterprise.
- Innovative
- Additional
Competition - Keeping
prices low - RIVALRY
- Reducing
Unemployment
- Motives Include:
Escaping a job,
Pursuing interest,
Exploit gap in the
market, innovation,
be your own boss,
work from home,
second career
- Risks, Rewards &
Opportunity Cost
- Risk:
Own
Money
- Reward: Financial &
Satisfaction (Monetary &
Non-Monetary Reward)
- Opportunity Cost:
Cost of next best
alternative. What
would you do with
time, money &
expertise otherwise?
- Government
Support
- Early Stages, Small
Business =
Vulnerable... Failure
- Government Grant:
Local & Central Gov.
Usually given out for;
Innovation, Research
& Development -
Training - Economic
Regeneration -
Encouraging Youths
- *Also Support
on the
internet!*
- Stakeholder: Individual/group
with an interest to the
business. inc. employees,
management, shareholders,
customers, suppliers &
competitors.
- Generating/Protecting
a Business Idea
- Sourcing
Business
Ideas
- Experience
- Previous
Job
- Hobby/
Interest
- Finding a gap
in the market
- Ad: Improved success rate, 'first mover
advantage', little/limited competition
- Dis: Little/No Expertise - prone to mistakes, Is it a real gap?
- Has it been done & failed?, Competition enters quickly.
- Brainstorming:
Process for
generating
innovative and
creative ideas
through
open-ended
group discussion
- Ad: Good knowledge of product, passion/interest of
product = motivation, contacts = established
market, entrepreneur have a reputation in market?
- Dis: Competition?, Passion may cause
overestimation of market, need entrepreneurial
skills as well as product knowledge
- Researching
Business Ideas
- Business/
Telephone
Directory
- Local maps
to locate
local
competition
- Small scale
research -
questionnaires
/interviews
- Market mapping -
Identify market
segments
- Protecting a Business Idea
- Copyright
- Protection given to
books, plays, films
and music
- Patent
- Exclusive right
to produce a
product usually
fixed period of
time - up to 20
years
- Trademark
- Word, image, sound
and smell enabling a
business to
differentiate itself from
it's competitors
- Franchising
- Franchise: Form of business
contract which the franchisor
agrees to sell to the
franchisee the rights to use
their name, logo and trading
methods
- Franchisor: The business
selling the franchise
agreement to the
franchisee
- Franchisee:
Entrepreneur who buys
the franchise agreement
from the franchisor
- Franchisor
- Advantages:
Expand quickly,
Limited risk -
Revenue is
certain - Turnover
not Profit, Risk is
shared - cost met
by franchisee,
Franchisee doing
work and earning
for the franchisor
- Disadvantage: Loss of
control on how the product
is presented to the
customer, Difficult to
control quality as franchise
network expands,
Coordination and
communication problems
increase as franchise
grows, Franchisees become
powerful as they acquire a
number of franchises
- Franchisee
- Advantages: Ability to
sell an already
established
product/service, can
take advantage of
central services for
FREE e.g. marketing,
purchasing, training,
stock control,
accounting systems
and administration
- Disadvantages:
Proportion of
revenue to
franchisor, may
not feel like it's
their own so
won't benefit
from the personal
rewards, rules
MUST be followed
- Resources in Goods & Services
- Business Inputs & Outputs
- Inputs: Contributing to the
production of a product/service
- Outputs: Occurs as a result of the
transformation of business outputs
- Primary Production:
1st stage of resources
extraction - land &
raw materials
- Secondary Production:
Resources transformation
to produce finished goods
& components - car
manufacture
- Tertiary Production:
Transformation of resources
to provide a service - service
sector (inc. retailing)
- Adding Value
- Added Value:
Difference in value
between price of
final product and
cost of materials
- Advertising
- Branding
- Product Features
- Location
- Personal
Service
- Reducing
Input Cost
- Differentiation
from
Competition
- Charging
Higher
Price
- Reducing
Sensitivity of
Demand
- Higher Profit Margins
- Targeting
product/service at
different market
segment
- Business Plans
- Business Plan: A
written document
describing the nature
of the business, it's
objectives, marketing
strategy,and
projected cash flow
forecast and income
statement.
- Contents
- Executive
Summary
- Business
Description
- Start Date
(New-businesses) or
how long it's been
trading
- History/
previous
owners
- Type of
business &
sector of the
market
- Legal
Structure
- Entrepreneur's
Vision
- Product/
Service
- How is it
different from
competition?
- Benefits of
customers will gain
- Plans for further
development
- Info on business
protection
- Strategy & Implentation
- Pricing
- Promotion
- Sales
Strategies
- Production
Strategies
- Location of
production
(ownership,
ads &dis)
- Production
(owned/leased, age,
capacity in relation to
forecast demand)
- Systems (stock
control, quality
control, financial
management &
IT)
- Market
Analysis
- The
market
(Size &
Growth)
- The
Competition
(Who,
Strength's &
Weaknesses)
- The
Future
(Market
Change &
Response)
- The
Customer
(Who &
Where)
- Management
Team
- Financial
Plan
- Purposes
- Future
Planning
- Identify
Action
Needed
- Setting
Objectives
- Performance
can be
measured
- Limitations - They often
prove unrealistic for small
businesses for the
following reasons
- Time
Consuming
- Money:
Time &
Advice
- Expertise -
Entrepreneur
may not
know
enough
- Opportunity
Cost
- Importance
Level?
- Sources of Help
- Small Business
Advisers
- Accountants
- Bank
Managers
- Government
Agencies
- Market
Research
- Market Research: Process
of gathering, analysing
and interpreting data
about a market
- Quantitive and Qualitative Data
- Quantitative: Numerical
Data. Collected in larger
scales - generate statistic
results. e.g. 8/10 People...
- Questionaire
- Telephone/Online
Survey's
- Qualitative: Data about
feelings, opinions &
attitudes. Why do people
behave/feel the way they do?
- In-depth Interview
- Group Discussions
e.g. Focus Groups
- Primary: (Field) -
Collected directly for
purposes of the business
- doesn't already exist
- Sampling
- Random Sample: One in which
each potential member of a
group has an equal chance of
being in the sample.
- Quota Sample: The sample
of a certain number of
people is taken from one
specific group of the
population, for example
100 females.
- Stratified Sample: The population is divided
into groups with common characteristics, for
example, people earning over £100,000, and a
sample is randomly selected from this group.
- Factors Affecting Choice
- Finance
- Nature of
Product
- Level
of Risk
- Target
Market
- Methods
- Observation
- IT
- Written
Questionnaire
- Face-to-face
Questionnaire
- Telephone &
Online Surveys
- Focus
Groups
- Test Marketing
- Disadvantages
- Expensive
- Difficult -
Accurate
- Inaccuracy =
Inappropriate
Decisions
- Lack of
skills/time
- Secondary: (Desk) -
Already in existence
- Collected from
existing research
- Internally
- Sales
Figures
- Stock
Records
- Geographical
Analysis
- Financial
Records
- Customer
Opinions
- Customer
Complaints
- Externally
- Telephone Book/
Yellow Pages
- Trade Associations
- Enterprise
Agencies
- Business
Link -
Government
Help
Organisation
- Competition
- Trade Press
- Larger
Scale
- Government Publications
e.g.nationalstatisticsonline
- Specialist Market
Analysis Companies -
Expensive...Detailed
- Markets
- Types
- Local: Customers are only
a short distance away
- National: Geographically
dispersed market where
customers are spread
over a large area
- Electronic: Doesn't
have a physical
presence - exists as a
virtual presence via
the internet. Many
business moved
from 'brick to click'
- Analysis
- Size: Measurement of the size of
total sales for a whole market -
expressed in terms of the value of
sales (currency) or volume (units).
- Segment: Group of consumers within a larger market
who have similar characteristics such as age/income level.
Segmentation: Technique where the market is broken
down into smaller sections with similar characteristics.
- Demographic - Breaks market into customers
characteristics. e.g. age, income levels,
gender, ethnicity & socio-economic groups.
- Geographic: Lifestyle, Personality,
Regional, National etc.
- Growth: Measurement of the change in market size.
Usually expressed as a percentage of it's original size.
- Share: Proportion of a
total market
accounted for by one
product or company.
- Demand: Quantity of a
product that customers are
willing & able to buy at a give
price over a curtain time.
- Factors affecting demand
- Incomes: Consumer incomes rise =
product demand increases...Incomes
decrease = demand decreases
Luxury Goods: *Income Sensitive*
than necessity demand
- Marketing: Often a positive relationship
between advertising expenditure &
other forms of marketing & demand
- Seasonal Demand: Important for
products such as clothing & energy.
Less important for food & customer
services etc.
- Legal Structure
- Sole Traders
Unincorporated
- Owned, controlled
& financed by 1
- Partnership
Unincorporated
- Owned, controlled
& financed by 2
- Private Limited
Incorporated
- Owned, controlled &
financed by at least 1
shareholder *LL
- Public Limited (PLC)
Incorporated
- Minimum of 2 but no
maximum shareholders *LL
- Social
Enterprise
- *Main objective
isn't profit.*
- Benefits inc.
Motivation,
Society, Easier to
recruit & retain,
grants& other
finance available
- Drawbacks. Profitability &
social aims may conflict,
entrepreneur takes lower
return - proportion go to
social aim.
- Franchise
- Business which has
brought the right to trade
as an established brand
- Limited Liability (*LL) - The owners liability is limited
to the amount they have invested to the business.
Unlimited Liability - Owners are personally liable for
all debts incurred by the business.
- Seperation of ownership & control: Situation where
owners are not the same as those controlling day-day
(Managers). Therefore each have different objective
for the business.
- Finance
- Internal - Finances raised from
within the business. e,g,owner's
savings, retained earnings/profit
& income from sale of assets.
- Personal - Ad. No ad. costs, confidence & no interference.
Dis. Opportunity cost, limited finance = limited purchases,
entrepreneur could loose everything, borrowing from
friend/family causes strains if not successful.
- External - Those outside
the business. e.g. banks &
shareholders
- Bank Loan - Good
source of finance for
assets e.g. machinery
& equipment & other
start-up costs
- Ad. Timescales used = Repayment Plan, interest Fixed
=Budgeting, Guaranteed, No lender agreement terms
(profit, percentage, control) Dis. Interest must be paid
regardless profitability, may have to be personally
secured, length of loan may be longer than life of asset
- Overdraft - Temporary
arrangement allowing the business
to draw out more money than in
the account. *Up to an agreed limit.
- Ad. Flexible, Quick & Easy
Dis. Expensive-Long Term,
Fees can be high, can be
removed at short notice
- Venture Capitalist - Professional
investor - Invests into business in
return for shares - usually, large
investments (£250,000+)
- Business Angel - Wealthy,
entrepreneurial individual,
willing to invest in small,
high risk business. *Expects
high return...likely to have
high growth potential.
- Crowdfunding - Funding a
new business by raising
small amounts from a
large no. of people-
typically online.
- Share Capital -
putting money in for a
share of the business
- Location
- Fixed Costs (Quantitative) -
Land/buildings, Government Grants,
Utility Bills, Cost of Managerial Staff
- Variable Costs (Quantitative) - Material Transport, Local
Material, Wage Levels, Bulk Increasing/Reducing
- Qualitative - Environment, Ease of Access,
Quality of Infrastructure (Roads, Airports,
Rail,Bandwidth) Quality of Labour, Planning
Laws/Restrictions, Competition
- Technology (Quan.) - (Teleworking = Entrepreneurs work from home,
Internet) Ads. Reduced Costs - Premises, Reduced Risk - No committing
to rent/lease, Reduced Travelling - More Work Hours, Plan around
Family Dis. Separation of Work & Home, Initial Start-ups - House rarely
suitable, loss of social aspects - lonely, Hidden Costs - house insurance,
council tax, tenancy agreement, Distractions - children, pets & TV
- Costs (Quan.) - Location decisions are CRUCIAL - Break-even analysis &
investment appraisal helps to decide based on financial information.
- Infrastructure (Quan.) - Transport Links, Raw Materials, Customers, Local Services
(Waste disposal, Entertainment, Health, Education, Public Services)
- Market (Quan.) - Start Ups = Close to customer - ESSENTIAL & away from
Competition, Growth = Geographically Dispersed - Good Location may change -
Transporting product could become more expensive than raw materials.
- Qualitative: Natue of Product - gain/loose weight during production? Service- Location influenced by
customer needs. Do costs differ in location? limitations in choice? What factor is most important?
- People in Business
- Employees
- Full Time: Usually around 35 hours +. Ads. Higher Output,
Available to handle unexpected events, Build better
relationships - Customer/Supplier, Customer Service =
Differentiating Factor, Easier to take training opportunities.
Dis. High Costs, Limited Flexibility - Capacity & Skills
- Part Time: Usually 35 hours or less, 2 types: Term-time Workers,
term time & school holiday staff, Zero-hour Contracts, no fixed
no. of hours, hours change dependent on demand & employee.
Ads. Flexibility, cover busy periods (peak trading), Part-time Job
Share = wider range of skills & talents, good for growing businesses
Dis. Difficult to access training, communication
difficulties, difficult to build customer relationships, may not be
much different in costs.
- Temporary: One who is employed for a fixed period
of time. Often seasonal & may work full or part
time. Rarely have the same benefits as permanent
employees such as pensions & health insurance.
- Ads. Volume which is uneven & uncertain,
small jobs e.g. IT system designed & installed,
may want to sell a product/service for a fixed
time only, helps short term shortage/loss e.g.
maternity, some become permanent over time.
Dis. May not know the workings & culture,
motivational concerns, constant changing
makes difficult communication, customers may
not like it - particularly services!
- Consultants & Advisors
- Consultants:
Businesses/individuals
providing professional
advice/services for a
fee. Often it's how to
make the business
more successful or to
deal with a problem.
- Benefits: Specialist skills without full-time employment, adjust size of
workforce up & down quickly, avoids searching & recruiting staff - can
usually be risky, start-ups can get advice in early stages - sometimes free
or at a subsidised rate.
- Drawbacks: Don't
know business as well
as employees, Not as
motivated, Can be
expensive
- Flexible Working
- Flexibility is a key benefit to
Part-time, A small business
wanting to operate longer, or
increase output will often use PT
staff to cover the additional work.
This can help small businesses
wanting to grow.