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The process by which new businesses are formed in order to
produce goods/services.…read more

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Government support
The government over the last few decades have tended to
favour a laid back approach. This means that the
government do not interfere in the market place unless
businesses require help. This is especially due to market
Market failure ­ failure of the market system to produce a
desirable efficient result.
Small firms have benefits but at the same time face major
problems.…read more

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Prevent discrimination against female entrepreneurs
and those from ethnic minorities
The government has introduced measures for start-ups
and support for growing businesses by:
Offering lower taxes
Reducing the burden on enterprises
Supporting new business start-ups through Business
Improving the support for small/new businesses
Increased funding to schools to create awareness of
business opportunities
Encouraging start-ups in economically poor regions of
the UK
Introducing legislation to promote competition
Funding projects to raise awareness of enterprise
Encouraging unemployed people to move into
self-employment e.g.…read more

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The main groups who award grants are:
The government
The European Union
Local authorities/councils/agencies
Business Links
How to raise finance
There are many sources of finance available to start
Ordinary share capital ­ shares that represent ownership
of a company
If you hold one share worth £1 in a multi-billion company
then you are a part owner. Ordinary shares will pay a
dividend and give voting rights.…read more

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Venture capital can also come in private equity finance.
The venture capitalists will invest large amounts of money
in a business in return for share of the company. They will
look for a high rate of return in a certain time period and
will only agree to invest if the business has a strong
business plan, sound management and a proven track
record making it difficult for start up firms.…read more

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Only pay for money Interest payments tend
borrowed to be variable making it
Quick and easy to hard to budget
arrange Banks may secure the
No charges for paying overdraft against the
off the overdraft business assets
Sources of business ideas
There is no point creating a product/service unless there
will be a customer base
Gap in the market but is there a market in the gap?
Good business ideas are able to:
Solve a problem
Offer a better and cheaper way
Be simple and…read more

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Business experience:
Good way of getting insights on what works best
Having a more realistic business plan
Requiring less need for market research
2) Personal experience:
Day to day activities, interests and hobbies
Bad experiences
3) Observations:
- Analyse the market and improving on what is already
- Look for poor customer service
The decision in the business idea may be as a result from an
unmet need in the market that is a gap.…read more

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Little or no competition in the early stages
Lack of knowledge in the product/service which makes
it more likely to make mistakes
Competition may enter quickly and attain market
The gap may not be real as someone may have tried it
Franchise ­ a business marriage between an existing
proven business and a new comer.
The franchisor is the business.
The franchisee is the newcomer.…read more

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Examples of franchises?
McDonalds, Subway, Pizza hut and Clarks.…read more



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