CCEA GCSE Business Revision Notes

Revision notes covering the enitre CCEA GCSE business course.

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  • Created on: 24-09-11 20:06
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Business Revision notes:
3.1 Entrepreneurs
Characteristics of an entrepreneur:
· Contributes original ideas
· Has selfconfidence and passion about their venture
· Ability to work independently and develop ideas
· Committed and willing to make personal sacrifices to benefit business
· Creative thinker and shows initiative
· Has vision of what the business could become and works towards the goal
· Has energy to work hard and to make sure the business receives its full potential
· Willing to take calculated business risks encouraging financiers such as banks to
lend money to enterprise
· Good leadership qualities
· Can motivate others
· Not discouraged by failures
Resources of a business:
There are four resources which are essential to every business. They are known as the
`factors of production':
Land: basic need to place the business premises, houses, roads and farms. However land is
used more widely in this economic sense and includes oceans and all natural and raw
materials e.g. oil, gas, fish, coal and minerals. Supplies of land are limited making it a
valuable resource.
Labour: refers to human resource in business the workers who are employed to
manufacture product or provide the service. The labour may be physical or manual,
depending on nature of firm's final product. Supplies of labour with appropriate skills are also
limited.
Capital: is the element contributed by capitalists i.e. the owners, to set up and maintain the
business. Capital includes money which owners have invested but also includes items which
were bought with that original investment e.g. premises. Capital is also in short supply.
Enterprise: contributed by people known as entrepreneurs. They are the managers and play
the most essential role in the business as they estimate future demand and ensuring that
production is at the correct level to meet the demand. It is the role of the entrepreneur to
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Each person who contribute the factors of production has to be rewarded:
Factor of production Contributed by Rewarded by
Land Landlords Rent
Labour Employees Wages and salaries
Capital Capitalists Interest
Enterprise Entrepreneurs Profit
Business ownership Private sector
Private organisations are owned, financed and controlled by private individuals. Their aim is
to make a profit.
Private sector form of ownerships:
Sole trader
Partnership
Private limited company (LTD)
Public limited company (PLC)
Franchise
Sole trader: is the most common form of business ownership e.g.…read more

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The sole trader is expected to have expertise in sales, purchasing, advertising,
accounting, window dressing, deliveries and stocktaking. This means they have to work long
hours. If the sole trader is ill or on holidays there is often noone to call on.
Partnership: most frequently found in professional businesses such as Doctors, dentists,
veterinary surgeons, solicitors etc. Also found in trades such as plumbers, hairdressers etc.
They are common in such businesses because expertise can be shared. A partnership
consists of a min.…read more

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Raise own capital
4) Difficulty in borrowing money
5) Possibility of conflict between partners
6) Lack of continuity
Limited companies
Shares and shareholders
Shares bought on stock exchange to raise capital, which makes them shareholders.
Company therefore able to raise money.…read more

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Amount of capital with which they are starting
A liability clause states:
That members liability is limited
An association clause which states:
A declaration by at least two people that they wish to form the company.…read more

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Public limited company (PLC)
Private limited company:
shares can't be bought by any members of the public (mainly just within families)
End of year shareholders are entitled to a share of profits which is paid in direct
proportion to number of shares each one holds.
Private limited companies advantage shareholders as hey retain control of business
while they enjoy the benefits of limited liability.
Advantages:
1. More capital
2. Easier to borrow money
3.…read more

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Specialisation and division of labour.
Disadvantages:
1. Owners have no real say on how it is run.
2. Formation of PLC is lengthy and a legal procedure
3. Financial information must be published for the information of the general public
4. In some companies top management and employees feel out of touch with one
another
5.…read more

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The franchiser loses:
1. Management of daytoday running of the shop. If local service is poor, the reputation
of the franchise is damaged.
Other forms of business ownership: Public sector
We have already looked at ownership in the private sector we are now going to take a closer
look at forms of ownership in the public sector.
Any business which is owned by the country as a whole and run on behalf of the people if
known as a public sector business e.g.…read more

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There are examples where it would be wasteful to have several organisations
duplicating services.
Aims of public corporations:
Mainly to give a service and nowadays are expected to make some profit or at least break
even.
Control
The government has overall control of the corporation and appoints a government minister to
take responsibility for it. The minister appoints a chairman and board of directors to take care
of the daytoday running of the industry.…read more

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Street cleaning
Health and environmental issues
Parks and recreational activities
Local housing
Parking areas
Maintenance of local roads
In addition they support:
The arts
Tourism
Economic development
Main sources of finance
1. Government grant
The government gives capital grant to the local authority to assist it with essential
building work.
2. Rates
Rates are paid by each householder and each business in the area according to the
size of their property.
3.…read more

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