Starting a business

opening a business, different types, how to open a buisness

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  • Created by: Simrah
  • Created on: 07-06-12 12:38
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Chapter 1- Starting a Business
1.1-Enterprise: What is a Business?
Business: An activity that requires the organisation of resources to achieve a
reward, whilst running a risk
Entrepreneur: An individual with an idea for business
Social Enterprise: An activity that achieves a reward for a society
People start a business to:
Pursue an Interest or Hobby
Escape an uninteresting job
Use new technology or ideas for making a product
Work from home
Provide a service or product to benefits others
Have a big business
Make the most of a business opportunity
Be their own boss
1.2-Finding a gap in the market
Gap in the Market: A business opportunity that is either a completely new idea or
adds something different to an existing product or service
Every business starts by someone/group finding a gap in the market
To find a gap in the market you do market observation/research
One way for market research is Market Mapping
Here is a map for drinks

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Franchise: The legal right to use the name and logo of an existing firm and sell the
same products
Able to sell an already recognised and successful product
Take advantage of experience of franchisor
Benefit from central services such as marketing and training
Some revenue is paid to franchisor
Lacks complete ownership
Can't make many changes without contacting franchisor
Could lose franchise
1.4-Business Objectives
Business Aim: A stated target for the future.…read more

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Business Objectives: Measuring Success
Turnover: The value of sales made during a trading period, also called revenue
Profit is measured using a formulae:
Profit = Revenue ­ Costs
1.6-Business Objectives: Stakeholders
Stakeholder: An individual or group with an interest in a business
This can be:
Bank Manager
Stakeholders also influence the business
1.…read more

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1.8-Business risks and uncertainty
Risk: The potential for loss but rewards in business make it a calculated gamble
Uncertainty: Not knowing the future or what is going to happen
When starting/running a business there is always a risk and uncertainty. There are
two types of risks involved in business; they are General Business Risks and
Functional Risks.…read more

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Sole Trader = One person
Partnership = 2-20 people
Sole Trader
Benefits Drawbacks
Simple and quick to set up Unlimited Liability for owner
Owner keeps profit Raising additional finances
Owner has complete control of Owner may not have expertise
Hours of work are made to suit business Reliant on health and well being of
owner owner
Benefits Drawbacks
Very few procedures to set up Unlimited liability for owners
Expertise of a number of people Profits are shared amongst owners
More sources of…read more

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Locating the Business
Technology: In relation to business location, this refers to the use of
e-technology, such as the internet and e-mail to create a virtual market between
the business and the consumer
Logistics: The process of buying, managing and delivering goods, from the point
of manufacture to the end consumer
Market: Where the buyer and seller come together to exchange the goods or
services for money.…read more



Full notes covering the reasons for starting a business, legal structures, objectives and stakeholders. Can be adapted for more personalised revision.

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