Role of Business enterprise+dynamic nature+aims and objective+risk and reward Flashcards
What is purpose of business activity
to
1) produce goods and services
2) to meet customer needs
3)to add value
Factors of Production
C - Capital
E- Enterprise
L- Labour
L-land
what is added value
finished product price- cost of inputs = added value
Ways to add value
H-HIGH QUALITY
U-USP
G-GOOD DESIGN
O-OFFERING CONVENIENCE
B-BRANDING
Why is added value imp to biz
-Allows to change premium price
-increase firms profit
-loyal customer
-creat usp with rivals
%change formula
](New price-Old price)/Old price]100
entrepreneur
takes risks, hires and orgnanises factors of production
enterprise
process by which new biz is formed
Why New ideas come about
1)Changes in tech (3)
2)Chnges in consumer want(4)
How new ideas come about
3)Original ideas (3)
4)New ideas (3)
1)-social media
-Advance robotics
-virtual reality
2)-variable tech
-ready meals
-sustainable products
-changes overtime
3)-to solve a problem
-fill a gap in market
-entrepreneurs Passion
4)- Mix and match
-New verison of old
-cheaper version of old
Smart
Specific, Measureable, Achieveable, realistic/relevent, timebound
aim
objective
aim- in general goals long term
objectives - how biz will achieve these goals short term
Market share
ALWAYS %
percentage of control on market
Market saturation
lots of same biz in a market
why aims / objectives change
-market conditions
-new tech
-legislation
3 business risks
-Biz failure - MOsT IMP
-Financial loss
-Lack of financial security
Limited liability
LEGAL SEPERATION between owner and entity. Their liability is only to the amount invested. OWNERS PRERSONELL POSSSESSIONS ARE SAFE IN LIMITED LIABITLITY
UNLIMITED LIABILITY
No seperation, if biz fails possessions of owner are lost
Public limited Company(PLC)
Private limited company(LTD)
plc- open to anyone to become shareholders
ltd - invites shareholders
