1.1 The Purpose And Nature Of Business Flashcards
What is a business
an organisation that provides goods and/or services
What is the purpose of a business
To meet the needs/wants of customers
What are the 5 reasons for starting a business
(Not etruaprenur)
- Financial Stability or Growth (comfortable living)
- Job Security (the probability that an individual will keep their job)
- Flexibility and Work-Life Balance (allows for people to live their lives whilst performing well in the workplace)
- Opportunity for Impact (positive change in your community or society)
- Legacy and Long-Term Value
What is the difference between a customer and a consumer
A customer buys the product,
whereas a consumer uses it
What is a good and give 3 examples
Goods are tangible and are items that are able to be used and stored
. Books
. Cars
.Clothes
What is a service and give 3 examples
Services are intagible(can’t be touched) and actions that can’t be stored
Hairdresser
Dentist
Lawyer
What is a need and give 3 examples
Goods and services which are necessary for living
e.g. food, shelter, and warmth
What is a want and give an example
Goods and services we would like, but are not necessary to survival
e.g. holidays, latest phones, entertainment
What are the four factors of production
Capital
Enterprise
Land
Labour
What is opportunity cost
The cost of forgoing one option for another
What are the three business sectors
primary
secondary
tertiary
What is the primary sector and give 3 examples
The extraction of earths natural resources
e.g. farming, mining, and fishing
What is the secondary sector and give 3 examples
Manufacturing goods from raw materials
e.g. builders, clothing makers, car manufacturers
What is the tertiary sector and give 4 examples
Providing services to consumers and other organisations e.g. shops, transport, entertainment, banking
What does enterprise (4 factors of production) mean
enterprise refers to a person spotting a business opportunity and setting up a business.
What is an entrepreneur
Someone who is willing to take the risks involved in starting a new business
What are the 7 characteristics of an entrepreneur
Innovative - having a vision of how things will be
Organised - Meeting deadlines
Hard working - Getting the business known
Risk taking - Being prepared to accept failure and try again. Taking the risk that their idea will work
Leadership skills -
Persuasive -
Lucky -
Why do people become an entrepreneur?
(8 options)
be their own boss - independence and have control
flexible working hours - Have a work life balance
to pursue an interest - Turn a hobby in a business
earn more money - Profit made by the business
identify a gap in the market
dissatisfaction with current job - Can build something succesful
Self esteem - Through business success
Personal Development
What are the 4 reasons for change in business environment with examples
Technology - New technology is always being adapted which affects how products are made and how we buy them
Economy - Borrowing money, increasing prices, money related issues
Legislation - New laws which affects costs and demand
Environment - The businesses affect on the environment like materials used and how it manufactures products
What is captial (4 products of production)
Capital - Buildings and machinery needed by the business
What you produce to make a product
What is Land (4 products of production)
Land - the natural resources used in the production of a product such as water, oil, fields or wood
What is Labour (4 products of production)
Labour - People working in the business
Example of opportunity cost
A photographer sets up a new business and has just enough money to pick between buying a new camera or new computer
The opportunity cost :
The choice of forgoing the camera or the computer as one has to be given up/sacrificed when another has been chosen
What is logistics
The process of planning and executing the transportation and storage of good from the begging of it being made to the customer/consumer
