Service - An intangible product e.g. financial advice
Customer - Someone who buys a product
Consumer - Someone who uses goods and services from a business
Entrepreneur - Someone who is willing to take risks
involved in starting a new business
Entrepreneurship - Refers to the ability to be an entrepreneur
Social Enterprise - A business that is set up to help society rather than making a profit
Resources - the inputs that businesses use to provide their goods and services
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
Intrest - Is the money paid by banks as a reward to attract people to save with them
Inters rates - The cost of borrowing money for the reward for saving money (as %)
Inflation - the rate at which prices are increasing. E.G. if inflation is 2% prices generally grow by 2% that year
Gross Domestic Product (GDP) - measure all income earned in country's economy that year
What are the main purposes of a business
to produce goods for sale to its customers
Provide services for its customers
Entrepreneurs:
take risks
see an opportunity
have determination, vision, focus and motivation
Are their own boss
Keep all the profits
Can decide when to work
The chain of production
Anotações:
a diamond is mined (primary)
a diamond factory will create a ring (secondary)
a jewellery shop will sell it (tertiary)
This is called interdependence
primary sector e.g agriculture or fishing
Anotações:
consists of growing, extracting or converting natural resources into raw materials
secondary sector e.g construction or manufacturing
Anotações:
Consists of converting raw materials into products for sale to businesses and individuals
tertiary sector e.g private services or public services
Anotações:
Consists of providing services to businesses and individuals
4 functions of a business
operations
marketing
human resources
finace
Factors
Land - the physical site the business is
located on and other natural resources a
business can use e.g. mines or crops
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
Labour - the skills and number of staff
employed by a business
Capital - the equipment used to provide
goods or services e.g. tractor on farme's
field
Opportunity cost - the sacrifice we make when
we decide to do something e.g. spending bus
fare on sweets means walking home.
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
The business environment
Technological change
Creates new products and markets
e.g. snapchat or uber
Economic change
Interest rate changes, inflation
changes and changes in gross
domestic product
Interest rates
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
Legal change
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
Environmental expectations
customers opinions on how a business and
its products affect the environment