Enterprise Flashcards
What is a business?
A business is an organisation that produces either goods or services in return for money.
What are goods
Tangible products that can be touched and consumed E.g phone or books
What is a service
Things other people or businesses do for you. E.g hairdressers or taxi ride.
Enterprise and their sizes
Micro enterprise - up to 10 people/staff
Small enterprise - 11-49 staff
Medium enterprise - 50-249 staff
Large enterprise- 250+ staff
Benifits of good customer service
-people would want to go back.
-customers will tell other people how good it was then they might come as well.
-can make prices higher as people are willing to pay.
-less complaints
-can introduce loyalty, get free items then they’ll keep coming back,instead of going to other places.
Reasons why business might fail
-make the prices to low that they arn’t going to make a profit.
-not good quality and high prices
-too high prices it makes people not want to buy the products.
-not popular
-too many competitors.
ST
-sole trader
-a sole trader is the only owner of their business.
Partnership
A partnership occurs when two or more people join together in a business enterprise to pursue a profit.
Pro’s of being an ST
-can make loads of money and keep the profit, don’t have to share with someone else
-you can have freedom in when you work or not
-you are your own boss.
-can make desisions without other inputs.
Con’s of being and ST
-if you get into dept people can take your belongings.
-fund the risk yourself
-don’t get sick pay
-don’t get holiday pay
-heavy work loaded.
Unlimited liability
-unlimited liability is where personal possessions of the owners of the business are at risk if there’s any problems.
-there is no limit to the amount of money the owners may have to payout.
Pro’s of unlimited liability.
-any loses will be share
-jobs can be shared
-simple form a business together
-partners can provide specialist knowledge and skills.
Con’s of unlimited liability.
-partners have to live with the decisions of others.
-decisions can take longer
-profits have to be shared.
-short life as if one partner leaves or dies the partnership ends.
Shareholder
-a person or an organisation that owns part of a company.
-each shareholder owns a ‘share’ of the business.
Turnover
Turnover means sales , the money made from sales.
SME
Small,Medium Enterprises
PLC
-public limited company
-you can buy shares, anyone can
-everything has to be announced to the public (accessible)
LTD
-private limited company
-being LTD means you are more protected
-you have to pay taxes if a LTD.
Limited liability
Your only responsible for the amount invested, personal assets beyond this are not at risk.
LTD advantages
-Private limited company
-original owners are likely to retain control
-firm is more prestigious
-easier to raise finance as can sell shares.
-limited liability
LTD disadvantages
-private limited company
-less privacy-public disclosure of company information.
-greater administrative cost
-limited liability.
LLP
-limited liability partnership
-some partnerships have limited liability.
-limited liability means that the partners are only responsible for the amount they have invested, therefore personal assets beyond this are not at risk.
-limited liability partnerships are often found in a professional enterprises E.g accountants
Social enterprises
-a social enterprise will have a motive to do good for society as a whole or for a smaller community.
-For example, a shop to support a local charity or a Co operative to sell goods from farmers in a community.
-profit earned by the enterprise will be re-invested to support the cause rather than to reward others.
-there are strict guidelines and laws for administration
-working for a social enterprise may be very motivational for the owner and employees, who may be volunteers.
Sectors of the industry
Primary sector
Secondary sector
Tertiary sector
Sectors of the economy
Private sector
Public sector
Third sector
Primary sector of the industry
Extract resources from the ground, sea or air E.g farming or fishing
Secondary sector of the industry
Turn the raw materials into finishes or semi finished goods E.g bakery, clothing manufacturer or jewellery designer.
Tertiary sector of the industry
Provides a service E.g gardener, baby sitter or fitness instructor
B2B
Business to business
B2C
Business to consumer
Bricks, clicks and flips
-often referred to as a multi channel rout to market
-bricks- a physical store
-clicks- an online store
-flips- a catalogue
Aim
-an aim is a long term goal that a company wants to achieve.
-the aim of most new businesses is to survive.
Objective
-objectives are short term goals a business sets to help them achieve their aim. (steps). E.g increase sales by 10% each week for a month.
Aims of enterprises
Making a profit
-profit=revenue-costs
-to achieve the highest possible surplus of revenue over costs.
Surviving
-the ability of an enterprise to continue to exist.
-to achieve this the enterprise must make enough money to pay expenses.
Breaking even
-when the enterprise is making neither a profit not a loss.
Some reasons to why people start up businesses.
-be your own boss > autonomy
-more pay > better wages
-flexible hours >work from home, get time off, work when you want.
-invent new thing > spot gaps in the market
-enjoy their hobbies > have fun
Enterprise
The formation of a new business
Entrepreneur
-a person who, having generated a new idea, develops it by setting up a new enterprise.
-often viewed as someone who is willing to take risks in setting up an new venture.
Skills
-skills are the abilities that an individual has in order to do something.
-skills can be: taught, developed, practiced, built on experience, natural to someone.
-some skills of an entrepreneur: knowledge of industry/sector, technical skills, interpersonal communication and presentation skills, planning and researching, time management, negotiation, prioritising tasks, problem solving, managing risks, leadership and teamwork.
Knowledge of industry/sector (skill)
-insight into the feild that the individual operates in.
Technical skills
The ability to carry out scientific roles such as IT, science, maths or engineering.
Interpersonal communication and presentation skills
-the ability to communicate and build relationships with others.
-the ability to share information in a way that is engaging and easy to understand.
Planning and researching skills
-the ability to set goals and develop strategies.
-the ability to find out information about the market.
-the ability to use researching findings to inform decision making.
Time managing
-managing process efficiently and effectively within a given time frame.
-the ability to meet deadlines.
Prioritising tasks
-the ability to recognise and understand tasks in order of importance.
-the ability to focus on the most important or urgent tasks.
Negotiation
-being able to reach agreement with others on a range of matters.
-getting a fair deal
Problem solving
-to understand a problem and identify possible solutions
Managing risks
The process of being able to identify and manage potential threats to an enterprise
Leadership and teamwork skills
-the ability to motivate and inspire other to achieve aims.
-the ability to work with others to achieve a common aim
Market research
-market research is the collection and analysis of data and information to inform and enterprise about its market.
-this could include: customer needs, competitor behaviours
Primary research
Primary market research (field research) involves the collection of first hand data that did not exist before. Therefore it is original data. Example of are> focus groups-giving samples to try out, observations-seeing how customers and competitors are acting, interviews- asking good questions, surveys- questionnaires.
Closed question
-a question that only requires a simple answer.E.g do you own a cat? Answer-> no(simple)
Open question
A question that has a more in depth response. E.g How did you find the drive? Answer-> I found the drive very smooth and comfortable. (More im depth)
Primary research, advantages
-get the information you want to know
-it’s up to date
-it could be data that other competitors might not have.
Primary research, disadvantages
-you could get it wrong
-can be time consuming
-can be expensive
-might not get honest answers
Secondary research
-secondary market research (desk research) is research that had already been undertaken by another organisation and therefore already exists.
-some secondary research is online, books, journals, trade magazines(specific types of magazines E.g a make-up magazine), market reports and government reports
Secondary research, advantages
-available immediately
-free or very cheap
Secondary research, disadvantages
-could be out of date.
-may not be accurate or reliable.
-the competitors have access to the same data.
Qualitative question
Used to gather people opinions and feeling -users answer in their own words. E.g what do you think of this cheese pizza? Answer-> I think it was to cheesy and not very tasty (customers own words)
Quantitative question
Used to gather information that can be counted or measured. E.g how many times do you go to the cinema a month? Answer-> 3
Market research, customers and competitors
-market research is collecting data/information about:
customer needs/wants.
E.g. what the customers like, how much customers are willing to pay, what they use to make a purchase(e.g Apple Pay) , when they buy and how they buy(e.g online)
Competitors behaviour.
E.g. what are the competitors up to, what are they selling, what might they be doing next, the design of their shop (e.g. layout, colours), how many shops/locations they’ve got, their prices, what offers are they doing.
Competitive advantage
-A competitive advantage is the ability to meet customer needs better than a competitor.
Examples
-the prices you sell goods at, better customer service, have more cleanliness/being more clean, faster service, more efficient, better quality products-> USP(unique selling point)
-you can achieve a competitive advantage by a trade mark. E.g the rides at Alton towers.
-Enterprises can compete on availability and convenience.
USP means
Unique selling point
Internal factors
-internal factors are the factors the business can control. E.g. quality of products, prices that get set, happy working space-> more motivated, provide quality training, better customer service than competitors, understanding the market-> market research.
External factors
The factors that a business can’t control
P.E.S.T
P
Political
-The political environment is the governments actions that impact of the decision made by the enterprise.
-this includes : government changes(e.g. new prime minister, or political party), new regulations(e.g. laws e.g minimum wage) , changes in taxation(income tax paid by workers.VAT paid on products, Co operation tax paid by enterprises).
-they will impact heavily on the competitive environment and the infrastructure that allows enterprises to operate effectively.
P.E.S.T.
E
Economic
-the key economic factors that influence the behaviour of enterprises and their customers.
-the economic cycle shows fluctuations in the level of economic activities in the uk economy.
-growth/recession -the willingness of enterprises to invest in future growth, level of employment- consumer incomes, intrest rates - costs of borrowing money, cost of energy- significant cost to both consumers and enterprises.
-these functions affected both enterprise and consumer confidence as well as ability and willingness to spend.
P.E.S.T.
S
Social
-the make up of humans within a country or area.
-this influences the behaviour of enterprises and customers.
-social change can occur as a result of demographic change. Demographics can include: gender, age ethnic background, education and behaviour.
P.E.S.T.
T
Technological
-the application of scientific knowledge for practical purpose.
-this has impacted heavily, within social media and developments in technology products.
-social media ->used to encourage the spread of promotional activities and increase brand awareness.
-energy efficiency->helps reduce costs.
-technological trends -> use of vertical communities to communicate with actual and potential customers, new products.
-cost of marketing and selling -> use of blogs, social media, virtual marketing, a-commerce.
Invest rate
-the cost of borrowing money, expressed as a percentage.
-for example if Mr cacace lends Mr weight man £100 for a year, at an intrest rate 10% after a year Mr weight man owes £110.
-most people receive interest on their bank accounts-a reward for using that company.
Rise in interest , customers
-people with a mortgage will have to pay more back on their loan.
-people with saving can benefit as getting more money.
Rise in interest, business
-loans go up so businesses usually put their prices up.
Fall in interest rates, consumers
People can borrow more money and therefore spend more money in businesses.
Fall in interest rates, businesses
-businesses can borrow money and expand
-low rates can help businesses get on track.
-encourages people to spend money instead of leaving it and saving it. This helps businesses make more sales.
Unemployment
If you are unemployed then you are willing and/or able to work but are currently without a job.
Why might businesses borrow money?
E.g premises, vehicles, equipment, extra stock, training employees.
E-commerce
E-commerce is the buying and selling of goods and services using the internet. The more recent development is m-commerce.
M-commerce
M-commerce is using wireless handheld (mobile) devices such as smart phones.
Examples of research
Political- you may want to consider: laws/regulations
1.advertising 2.consumer protection 3.minimum 4.health and safety 5.environmental regulations 6.data protection 7.good hygiene 8.public liability
S.W.O.T
S-strengths
W-weaknesses
O-opportunities
T-threats
HR
Human Resources
