Unit 1 - Business Intro & Objectives F.O.P Flashcards
What is a business?
A business is a particular type of organisation – one which involves people and resources in the making of a good or the providing of a service.
What is a need?
A need is something necessary for survival. Needs are prioritised over wants.
What is a want?
A want is something you can live without; a luxury or desire which increases your standard of living. They are limited by your budget.
What is a good?
A good is a tangible (touchable) product. They can either be durable (lasts more than a year) or consumable/non-durable (consumed within a year).
What is a service?
A service is an action that is carried out for us. People buy services.
What is disposable income?
Money left over and available to spend after all monthly commitments have been paid (rent, mortgage, utility bills, tax etc.)
Examples of needs?
Food, water, clothes, shelter, electricity/fuel.
Examples of wants?
Private education, Ferrari, iPhone, fancy holiday to Lanzarote.
Examples of goods?
- Tomato - non-durable/consumable
- Laptop - durable
Examples of services?
Restaurant, MOT, teaching, Amazon package delivery.
Reasons for buying services?
- Not qualified (surgery)
- Not enough time (education)
- Not skilled (car maintenance)
- Too lazy/Convenience (Take-away/restaurant)
- Present/gift (taking someone out to dinner)
- Messy/dangerous (Window cleaning)
- Physical hindrance (Caring for the disabled)
8.Status symbol (Expensive haircut, dry-cleaned clothes)
What is turnover revenue?
The money that comes before costs are accounted for. It isn’t an accurate representation of whether a business is successful or not.
What is profit?
Profit = turnover - costs.
Profit is the real indication of business success. Where a business makes profit, it creates wealth.
Reasons for starting a business
- Making money
- To be famous and well-known
- To solve a social issue
- Gap spotted in market
- Motivation/ Want to help others
- Want to showcase your skills/You have a dream or passion or interest
- Hate your job or situation and want to be your own boss
8.Like to take risks
What are the Factors Of Production?
The internal factors of a business that it has control over - Capital, Enterprise, Land, Labour.
