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Business Studies
Unit 1…read more

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Starting a Business
· Businesses provide products to markets.
· To succeed, they need to find a gap in the market.
· Often they ate set up to make a profit.
· Profit is the surplus of revenue over costs and the reward for the
· Sometimes they are set up to provide a service to a community.
· A franchise is permission to sell a product or brand or to use the
successful format of an existing business.
· There are two key players in a franchise.
· The franchisee buys the franchise from the franchiser.
· The franchisee buys into the success of the established business. It
buy the use of it's name, it's brand, it's advertising and it's support
· The franchiser is the seller of the franchise that has a successful
product, brand or format.
· Franchisers charge a fee for the franchise and collect a royalty,
usually based on a percentage of the annual sales of the franchisee.
· Because a franchisee is buying into a successful product, the fee for
the franchise can often be high and competition to buy a franchise…read more

Slide 3

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Starting a Business
quite fierce.
· Franchisers may be restrictive- insisting on particular suppliers and
making sure uniforms, products and services are identical.
· The advantages to franchisees is that they buy into an established
business and may receive help with products, staff, training,
marketing and sales materials. They are more likely to succeed.
· Franchisees may also gain an exclusive territory, away from
competition for the same brand.
· The disadvantage is that there may be restrictions on how they can
run the business.
· The advantage to the franchiser is that their idea or brand is
spread. It is a way to expand a business.
· Franchisers also receive an income from the franchisee.
· One disadvantage is that a poor franchisee may harm their
· Aims are long term goal towards the business can work.
· Aims are often not precise; a business may, for instance, aim to be
the `customer's first choice', `the best in the world' or `always out in…read more

Slide 4

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Starting a Business
in front.
· Sometime the aim of a business will be contained in it's mission
statement or vision.
· The main aim for a start-up business is survival; further aims may be
profit, growth or bigger market share.
· Most businesses will aim to satisfy their customers.
· Owners may also want to achieve their aims, such as independence, a
good reputation and loyal customers.
· Businesses often have aims to act ethically and sustainably.
· Acting ethically means doing the right thing or being moral: for
example not using child labour or exploiting poorer countries.
· Acting sustainably is an environmental aim that means the business
should take no more out of the environment than it puts back in.
· This is achieved through green energy, recycling, creating less waste
and using sustainable resources.
· The steps on the way to achieving an aim will be marked by shorter
term objectives.
· Objectives will be more clearly defined than aims- setting them…read more

Slide 5

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Starting a Business
helps the business move forward.
· Progress can be measured by seeing how well objectives can be met.
· `SMART' is the term used to remember what objectives should be in
order to be useful to a business.
· SMART objectives are Specific, Measurable, Achievable, Realistic
and Time-related.
· Stakeholders with a direct interest in the business are called
internal stakeholders and include owners and employees. In a small
business, the owners will be a single person (sole trader) or a small
group of people (partnerships, co-operatives, private limited
· Shareholders are a special group of owner. Each has a share of the
business. In private limited companies, shareholders are limited to
family and friends.
· Owners would like success and profit. Each has a share of the
business by investing. Owners make key decisions about the
business, such as what to sell, what markets to operate in and
whether to expand.…read more

Slide 6

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Starting a Business
· Employees would like decent working conditions and fair pay.
Employees can influence the business through working hard and
being skilled and motivated-or not.
· Managers are the employees who help to run the business. Their
influence extends to taking day-to-day decisions in the business.
· External stakeholders have a less direct stake in a business. They
include customers, suppliers, banks, communities, government and
pressure groups.
· Customers want quality and reliability. They influence the business
by buying or not.
· Suppliers influence the business through quality and reliability of
the supplier.
· Financial stakeholder, such as banks, have lent or given the business
money. They can decisions that are in their own interests, rather
than those of the business.
· The community may want the business for reasons (employment) but
not others (pollution).
· Government influences businesses through law and taxation.…read more

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Thanks! you helped me a lot :P 

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