1.1 - The purpose and nature of business

1. Good - A physical product e.g. car
2. Service - An intangible product e.g. financial advice
3. Customer - Someone who buys a product
4. Consumer - Someone who uses goods and services from a business
5. Entrepreneur - Someone who is willing to take risks involved in starting a new business
6. Entrepreneurship - Refers to the ability to be an entrepreneur
7. Social Enterprise - A business that is set up to help society rather than making a profit
8. Resources - the inputs that businesses use to provide their goods and services
9. Enterprise - Another word for business. Also refers to the skills of people involved in the business to identify business opportunities and bring together resources to meet them
10. Intrest - Is the money paid by banks as a reward to attract people to save with them
11. Inters rates - The cost of borrowing money for the reward for saving money (as %)
12. Inflation - the rate at which prices are increasing. E.G. if inflation is 2% prices generally grow by 2% that year
13. Gross Domestic Product (GDP) - measure all income earned in country's economy that year

1. to produce goods for sale to its customers
2. Provide services for its customers

1. take risks
2. see an opportunity
3. have determination, vision, focus and motivation
4. Are their own boss
5. Keep all the profits
6. Can decide when to work

Annotations:

• a diamond is mined (primary) a diamond factory will create a ring (secondary)  a jewellery shop will sell it (tertiary) This is called interdependence 

1. primary sector e.g agriculture or fishing

   Annotations:

   • consists of growing, extracting or converting natural resources into raw materials 
   1. secondary sector e.g construction or manufacturing

      Annotations:

      • Consists of converting raw materials into products for sale to businesses and individuals 
      1. tertiary sector e.g private services or public services

         Annotations:

         • Consists of providing services to businesses and individuals 

1. operations
2. marketing
3. human resources
4. finace

1. Land - the physical site the business is located on and other natural resources a business can use e.g. mines or crops
2. Enterprise - The skills of the people involved in the business to identify business opportunities and bring together resources to meet opportunities e.g. skill to drive a factor
3. Labour - the skills and number of staff employed by a business
4. Capital - the equipment used to provide goods or services e.g. tractor on farme's field

1. When an entrepreneur starts a business they must sacrifice a regular wage from an employed job to a less secure income of a new business

1. Technological change
   1. Creates new products and markets e.g. snapchat or uber
2. Economic change
   1. Interest rate changes, inflation changes and changes in gross domestic product
3. Interest rates
   1. Changes in the cost of borrowing money from banks, inflation is the rate of prices of products are increasing and GDP is the income the economy is generating
4. Legal change
   1. New laws and regulations that can affect how much it costs to run a business e.g. businesses must pay a minimum wage to workers
5. Environmental expectations
   1. customers opinions on how a business and its products affect the environment