AS Business Studies: Enterprises

Hey, here are some revision notes mainly for people taking AQA AS Business Studies Unit 1 (the new course) but it can help you for other exams too. I hope this helps you to revise! Please rate and comment on how to improve :D 

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  • Created on: 13-11-10 21:15
Preview of AS Business Studies: Enterprises

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Enterprise = the ability to handle uncertainty and deal with effectively with change
Entrepreneur = someone who starts and runs a business and has responsibility for
the risks involved. In order to do this, an entrepreneur has to be able to manage
the 4 factors of production effectively: land, labour, capital and enterprise
Entrepreneur Skills
­ Innovative, imaginative, creative ­ in order to come up with an idea for a
business / new products / services.
­ Passionate (about their business idea) ­ This is important in providing the
internal motivation / drive and commitment to turn their idea into a
successful business. It will also be important in convincing others to lend
money or invest in the idea, if external finance is required.
­ Willing to take responsibility ­ Entrepreneurs are responsible for organising
the resources (e.g. people, finance, equipment, stock, etc) to see the idea
­ Willing to take calculated risks and tolerant of uncertainty ­ Entrepreneurs
often invest their own personal funds in an idea for which there is no
guarantee of success. Possibly the most important quality of an entrepreneur
­ Hard working, determined, persistent and energetic ­ A great deal of time,
effort and commitment is generally required to set up and establish a
business on a sound footing.
­ Self-confident ­ This is important in inspiring confidence in and motivating
others, including employees, lenders / investors, suppliers.

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Page 2

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Entrepreneur Cont.
­ Optimistic ­ Setting up a business can be tough and not always go
according to plan. An optimistic nature will help to ensure an
entrepreneur does not give up on the idea at the first hurdle they face.
­ Flexible ­ External, uncontrollable and, often, unforeseeable factors
such as the arrival of a competitor, changes in taxation and interest
rates can affect the potential success of an idea and plans for its
achievement.…read more

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Risk = The possibility of an event or condition occurring that will have a negative
impact (eg cause damage, injury, loss) on something perceived to be of value
Risk taking is a key feature of entrepreneurship and economists define
entrepreneurs as risk takers. You should note, however, that successful
entrepreneurs are most likely to be the ones that take `calculated' risks where
there is a strong possibility of success.
If the risks fail, this can lead to...
financial loss...…read more

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Minimising Risks
· undertaking initial (and ongoing) market research. This is more likely to
detect problems / weaknesses with particular decisions / strategies, as well as
potential threats (e.g. new competition, changes in the economy affecting the
level of customer demand) and, where possible, enable timely response to
such threats.
· drawing up a detailed business plan.…read more

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Rewards for taking Risks
Financial reward comes in the form of profit and capital gains (made by selling
the business)
Without the prospect of profit, an entrepreneur is not likely to enter the
market and, unless the entrepreneur achieves a level of profit considered
satisfactory to him or her then he or she will, in the long run, leave the market
Profit is, therefore, essential as a motivating force in business, and financial
reward is frequently cited as the main reason why people decide…read more

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Importance of Risks and
In the UK, people tend to be risk averse they are afraid of failure. As the majority
of new businesses fail, such fears are well placed.
Failure occurs for a number of reasons:
­ lack of finance
­ skills shortages
­ poor infrastructure
­ complexity of regulations or red tape
However, the ability to evaluate the risks and uncertainty that are an integral part
of almost all business decisions is an important element of successful
entrepreneurship.…read more

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Opportunity Cost
In simple terms, opportunity cost is what we sacrifice (or forego) when we
decide to take one course of action over another.
In business terms, opportunity cost is the value of the benefit(s) of the next
best alternative course of action forgone, when making a choice between
alternative courses of action.
Entrepreneurs have to take decisions ­ every decision involves opportunity cost.
Resources are nearly always limited ­ particularly cash for a start-up.…read more

Page 8

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Motives are the reasons behind human behaviour. People set up their own
business for a variety of reasons which can broadly be divided into two sets of
factors ­ push and pull factors.
People may be `pushed' into becoming an entrepreneur because of the
unacceptability of any alternative and / or `pulled' into entrepreneurship by the
attractions of running their own business.
The UK is becoming an increasingly entrepreneurial place and more people are
interested in setting up businesses.…read more

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Push and Pull Factors
People are `pushed' into setting up their own business by factors such as:
­ Redundancy and unemployment (or fear of it).
­ The inability to find employment which is sufficiently satisfying, rewarding or
­ Disagreement with management / management styles and/or conflict with
work colleagues.
­ Lack of interest in, and commitment to, organisational goals.
­ In each of the above people set up in business because of dissatisfaction with
the alternatives.…read more

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Government Support
Government support for enterprise and entrepreneurs within the UK mainly
comes in the form of information and advice, financial assistance, tax concessions
and regulatory reform.
The aims of government support are to:
­ Provide free information & support
­ Reduce burden of regulation ("red tape")
­ Encourage innovation & job creation
­ Incentives for investment (e.g. tax breaks)
­ Financial support for assisted areas (e.g. grants) and certain industries (e.g.…read more



Wow, thanks this is a really well organized revision guide. I am currently a new a level business student and this helped me a lot, so thanks again.


This is amazing, thanks.

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