Class notes
AS Level Business Chapter 1
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Full lecture notes about AS Level Business chapter 1 and HRM
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EnterprisePurpose of business activity
-
Any organisation that uses resources to meet the needs of customers by providing the product /
service they demand
-
Businesses use the scarce resources of the
planet add,
value to them to produce goods /services for
people to use
this gives people higher standard of living than if they just produced for themselves
-
a
Factors of production
site of buildings
Risk takers ←Raw
Land
Enterprise f- Decision maker materials
coordinators
←
Requires the use
of this 4 factors
Finance Skilled
/
F Factories Labour
T Unskilled
|
capital
Machines
Permanent
Temporary
How a Business creates or adds value
Business buys Production process Business sells the
raw materials to add value finished good for profit
Economic activity and the
problem of choice
-
There are a limited amount of resources in our world and an unlimited amount
of wants .
This is the economic problem .
-
The opportunity cost of buying one thing is that couldn't buy the other
you
Role of an entrepreneur
Have an idea for > Invest some of Accept the > Accept the
>
a new business their own savings responsibility of possible risks
capital the of failure
or
managing
business
characteristics of a successful entrepreneur
-
Innovation
-
Leadership skills
-
Commitment & Self motivation -
- Self confidence & ability
-
to bounce back
- Multi skilled
-
Risk taking
,Major challenges faced by a business
Identifying successful business opportunities Sourcing capital (finance )
Determining a location
competition
Building customer base
Why do new business often fail ?
°
Lack of record keeping °
Poor management skills
•
Lack of cash and working capital
•
Changes in the business environment
classification of business activity
Primary Sector Secondary Sector Tertiary Sector Quarternary sector
Exploitation or withdrawal Processing or manufacturing Providing services Providing IT
of raw materials of raw materials into product services
Personal
Employment development
creation
Impact of enterprise
on a country 's Exports
economy
Economic Innovation and
Growth technological change
Firm's survival Increased
social cohesion
growth
Social Enterprises
Does not primarily focus on making profit
°
•
Positive impact on the world
Economic : Make
profit to reinvest back into the business and
provide some return (money ) to owners
Environmental : To protect the environment and manage the
business in an environmentally sustainable way
Social : Provide jobs or
support for local people who are often poorer
↳ Triple bottom line
, Business Structure
Social Enterprises
Characteristics Aims
They operate for Socialenterprises have three main objectives
well
being of
• -
the These aims are often referred to as triple
society
bottom line
•
Making profit is not the main aim
↳ Main aim is to solve social problems
↳ •
Economic (Profit )
faced by people
•
Social ( People I
•
Environment (Planet )
Benefits of Social Enterprises
Fiscal Responsibility It reduces the myriad costs of public supports for people facing barriers
•
:
,
by providing a pathway to economic self-sufficiency for those it employs
Public safety Community operates safer by
disrupting cycles of poverty crime incarceration
•
:
, , , ,
chemical dependency and homelessness
•
Economic opportunity Improves : our pool human capital and create jobs
•
Social justice :
gives a chance to those most in need
Business Structure
Private Sector Public Sector
•
Own and controlled
by individuals or •
Refers to all the businesses that are owned
groups of individuals by the government on behalf of the public
• Aim to make profit through sale
of private goods
Example :
•
Sole trader
•
Partnership
• Private LC
°
Public LC
•
Co -
operative
Examples of Business structure in private sector
sole Trader
-
One person provides permanent finance and has full control and is
able to keep all the profits Owned by one
person .
Advantages Disadvantages
•
Easy to
form
•
Has personal contract °
Unlimited liability
•
Has direct control with both customers •
Can raise little capital
•
All profits go to the and employees °
limited management expertise
owner •
Easy to terminate •
Poor quality decision making
•
No double taxation °
Difficulty
attracting qualified employees
in
•
Lack of continuity when owner dies
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