This is a detailed 47-page long revision summary of SOME of the documents covered in AQA GCSE Business. This includes all of Unit 1, Unit 2.1 and Unit 2.2, Unit 3.1 and Unit 3.2 and all of Unit 5. This document does NOT cover everything because I started it in Year 9 and never finished it but it is...
Business Revision
Important equations and definitions:
Gross profit = business revenue - cost of goods sold
Net profit = the actual calculated profit after all expenses are taken into account, such
as rent, utility bills and employee salaries
★ Profit = revenue - costs
★ Revenue = quantity of units sold x price of one unit
★ Total costs = fixed costs + variable costs
★ Market share (%) = (business sales/market sales) x 100
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Unit 1: Business in the real world
Unit 1.1: the purpose and nature of a business
❏ A business is an organisation that utilises workers and machinery to convert raw
materials into goods and services to satisfy the needs of the customer and
ultimately the consumer
❏ There are four factors of production: land, labour, capital and enterprise
Reasons for starting a business:
❏ To support yourself and your family with the profits from your business
❏ To supply a community of people by meeting the needs and wants of society
❏ Self-employment means that there are no necessary qualifications required to
start a business
❏ Flexible working hours can work to fit a routine and you can tailor a business to
fit your own needs
❏ Simply fulfilling your passions, skills and interests
❏ Identifying a gap in the market which could lead to major success or entering a
completely new market
There are typically four “areas” or departments which are required in order for a
business to run smoothly. These are:
❏ Marketing - advertising the business and ensuring the customer base is as large
as possible in order to promote the business’s success
❏ Finance - managing the revenue, profits, total costs and other costs that are
associated with running the business
❏ Operations - the day-to-day running of the business and effective management
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❏ Human resources - dealing with employees in terms of training, recruitment and
selection of workers
Glossary for Unit 1.1
Entrepreneur: anybody with a business idea or venture that is willing to take risks for a
potential financial profit
Goods: tangible products that can be sold to customers
Services: this is work performed in an expert manner by an individual in their field of
expertise and is not a tangible product
Needs: anything that is required to sustain life, such as food and water
Wants: something that is not required to sustain life but helps to make life easier or
satisfies the customer and/or consumer
Opportunity cost: what you have to give up when choosing how to use resources. For
example, if I had 2,000 and chose to buy a second-hand car over a holiday to Tenerife,
the holiday would be the opportunity cost.
Primary industry: the point at which raw materials are sourced, such as fishing, farming
and mining for said materials
Secondary industry: this is where goods are manufactured or constructed from raw
materials, such as car manufacturing or house building
Tertiary industry: where goods and services are finally sold to the customer or
consumer in return for revenue for the company
Customer: the person who pays for the product
Consumer: the person who uses the product (*the customer and consumer are often
the same person)
Factors of production:
Land: any natural resources, such as raw materials, used by a business
Labour: mental and physical effort undergone by human workers who receive a salary in
return for their work
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Capital: goods and services made by humans to help them make other goods and
services. In other terms, assets that enhance one’s power to perform economically
useful work. This could include infrastructure like roads
Enterprise - a term used interchangeably with “business”, this is the organisation of the
other mentioned factors of production so that the business can produce good quality
goods and services. The business or enterprise may then receive profit for taking
financial risks
Unit 1.2: business ownership
Sole traders
A sole trader (or sole proprietor) runs a business as an individual and is self-employed.
Consequently, they don’t employ or work with anybody else and have complete control
over the management and potential profits of the company.
Advantages of sole traders Disadvantages of sole traders
● You can run your own business ● You are personally liable for the
and do what you want with it (you business if anything goes wrong
rarely have to compromise or get in and you are at risk of losing
disagreements with others about possession of personal items and
how you run it) assets (unlimited liability)
● You are self-employed and can ● If you suddenly can’t work or
work however many hours you something happens within the
want market you are in then the
● You don’t require any qualifications business could easily fail
● You can keep all of your business’s ● Difficult to raise capital
profits after tax ● You have nobody to share ideas
with or other areas of expertise
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