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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…

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1.3-Franchises

Franchise: The legal right to use the name and logo of an existing firm and sell the
same products

Advantages:

Able to sell an already recognised and successful product
Take advantage of experience of franchisor
Benefit from central services such as marketing and training

Disadvantages:

Some revenue is paid…

Page 3

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1.5-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:

Employees
Customers
Managers
Shareholders
Suppliers…

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Timescale

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;…

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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
business
Hours of work are made to suit business Reliant on…

Page 6

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1.11-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…

Comments

davidsalter

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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