Economics 2.1

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  • Setting up a business 2.1
    • Profit Motives
      • 1. Survival
        • 2. Profit
          • 3. Provide for family
            • 4. Increase Revenues
    • Non-Profit Motives
    • Social Enterprise
      • Individuals who benefit from running/working a social enterprise. Social enterprises are businesses with social aims.
      • Benefits:
        • 1. Provide employment for local people.
          • 2. People looking for a career change.
            • 3. People with learning difficulties
              • 4. Ex-offenders, disabled
    • Adding Value
      • Changing a raw material to make it consumer ready e,g packaging
      • Adding Value represents the difference between the cost of material inputs and the eventual value of the product in terms of the price that can be changed for it.
        • Value added at each production stage:
          • Value Added = Value of Output - Value of Input
        • In order to produces, businesses need:
          • 1. LAND - e.g Buildings
            • 2. CAPITAL e.g money, equipment, machinery
              • 3. LABOUR e.g Human Resources, human capital.
                • 4. ENTERPRISE e.g Ideas
  • 1. Be own boss
    • 2. Work from home
      • 3. Help others
        • 4. Ethical reasons
    • Non-Profit Motives
  • 3. LABOUR e.g Human Resources, human capital.
    • 4. ENTERPRISE e.g Ideas

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