BUSS1 - topic tracker

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BUSS1 - Enterprise and Entrepreneurs.

Characteristics;

determination/persistence

ability to spot opportunties

motivation to succeed

willingness to take risks

Opportunity Cost;

"The next best alternative foregone."

Governmental Support;

give grants or funds to new business start-ups

reduce business costs

Motives for starting a business;

more freedom at work

to provide employment for the local area

to make money

Risks and Rewards;

"Taking risks can be a profitable venture"

lack of finance

skills shortages

poor infrastructure

'red tape' - regulations and legislation which limits what a business can do and which may add to the business costs.

BUSS1 - Generating and Protecting Business Ideas

Sources of Business Ideas;

spotting trends

identifying niche market

copying ideas from other countries

taking a scientific approach

Franchising - is when the owner of a business (franchisor) grants a licence to another person or business (franchisee) to use their business idea.

Benefits of being a franchise;

less amount of start-up risk

usually have established brand names

financing the business will be a lot easier

lower advertising and promotional costs

relationships with suppliers already established

support and training

Possible pitfalls of being a franchise;

franchisor may not have researched the business

costs may be higher than expected

ongoing royalties may have to be paid to the franchisor

other franchisees may give the brand a bad reputation

restrictions on how the business should be run

required to sign non-competition clauses

Protecting a business idea;

Copyright - legal protection against compying for authors, composers and artists

Patent - an official document granting the holder the right to be the only producer of a newly invented product

Trademark - sign, logo, symbol, or words displayed on a company's products or on its advertising

BUSS1 - Transformation Resources into Goods and Services

Inputs;

Land - all the natural resources that can be used for production, including land itself, but also natural and mineral resources (e.g. oil) and animals (e.g. cows, fish)

Labour - both the physical and mental effort involved in production

Capital - goods that are made in order to produce other goods and services (e.g. factories, machinery, lorries)

Enterprise - bringing together the factors of production to create goods and services.

Outputs;

Primary Industries - Natural resources

Secondary Industries - Manufactured goods

Tertiary Industries - Services

Adding Value - "the process of increasing the worth of resources by modifying them.

added value = sales revenue - the costs of the bought-in materials, components and services

BUSS1 - Assessing Business Start-ups

Risks and causes of business failure;

Finance - raising funds, problems with cash flow, uncertainty about costs

Marketing - deciding on the product, forecasting demand, deciding on the target market, conducting market research, deciding on price, advertising and promotion

Operations - finding suitable premises, deciding on location and production methods, identifying reliable sources of supply, new technology

Personnel and the organisation - decision on recruitment, providing training, decisions on most effective organisational structure, quality of management and skills needed

External factors - complying with regulations, impact of micro-economic policies, the competitive environment in which the business operates

Personal problems - suitability for self-employment, providing cover for illness, opportunity cost of the business start-up

Issues to consider;

the business objectives

product or service being provided and whether its profitable

customers' needs

target market segment

possibility of competition

appropriate pricing and selling strategy

finances

any risks involved

who will be involved/doing what

Questions to consider;

Is there anything special about the product that would appeal to consumers?

Could the product compete successfully with similar products on the market?

Problems when business has been running a while;

unexpected changes in demand for the product or service

unexpected changes in costs

delays and unavailability of supplies

Enterprise & Entrpreneurs

Generating & Protecting Business Ideas

Transformation Resources into Goods and Services

Assessing Business Start-ups