unit 1 business studies notes

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Business Studies Unit 1 Introduction To A Small
Business
Businesses
¾ of all businesses in the U.K are sole traders
Businesses provide goods (bricks) or services (haircut)
Setting up a business involves spotting a business opportunity
When there are customer needs that aren't being met there is a possible business
opportunity
Customer Needs
For a business to be successful you need to carry out market research either Primary
(field research data you collect) or Secondary (desk research data collected by others)
There is also Qualitative data (opinions and attitudes) and Quantitative data (numerical
facts and figures)
Information a business might want to find out through market research competition, set
up costs, customer needs, how much customers are willing to pay and how often they will
buy.
Market Mapping
Market mapping is a diagram showing the range of positions in a market used to
compare businesses and identify business opportunities
You need two variables price and quality after that you can produce a market map and
place products or business on the map. For example
Mass market beers (popular and common)
Ye Old Pub Starz
Nightclub
Traditional interior Modern Interior
(Old fashioned) The Crown Willies Wine (Contemporary)
(Sally's pub) Bar
Niche market Beers (specialist and rare)

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Competition
Ways a business can compete:
Quality providing a better service/good
Design if your design is unique it will attract customers, however trends seem to change
a lot
After sale service Supporting customers after they have bought a product/good, this
will help build a loyal relationship
Price businesses compete on price to win over customers.
Brand image is a named product that people see as being different.…read more

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Enterprise
A willingness by an individual or business to take risks, show imitative, undertake new
adventures.…read more

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Why? am I setting up my own business/ will people buy my products and not my
competitors
What If? I can't get a loan from the bank/customers don't come to my business/ another
business sets up which is just like mine?
Calculated Risk
When you calculate a risk you need to write down all the upsides and all the downsides of
your of your new business idea
From your information of your upsides and from your information of your downsides you
can then put that…read more

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Profit= total revenue ­ total costs
Forecasting cash flows
Cash inflows is money that comes into the business (cash from sales, loans from bank)
Cash outflows is money that is paid out of the business (wages, bills, tax, advertising)
Businesses need to keep a cash flow forecast, this will predict how much cash flows in
and out of a business during a period of time.…read more

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Research into the market
Information on potential competitors
Key personnel in the business including their position and salary
The sources of finance for starting up the business
How the business will be marked
Information on suppliers and any production methods
Budgets for income and expenditure
A cash flow forecast for the first 12 months
Obtaining finance
Short term finance sources needed to be repaid quickly or immediately
Long term finance sources borrowed or invested for over a year
Long term finance
Share capital selling shares…read more

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You can only loose what you invested into the company
You have to have at least one shareholder could be owner
Your shares can only be sold to family/friends they can not be sold on the stock market
You might want to sell shares to bring in money to the business for growth
The impact of the exchange rate
Exchange rate is the value of one currency expressed as the value of another.…read more

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The next stage is to shortlist the best three candidates and interview them.
Judging on the applicants CV and interview the business chooses what they feel id the
applicant for the job.
Training
After the recruitment process a lot of businesses train the applicants for techniques,
skills and processes that are required for the job.
Motivation
After training your workers need motivating, your workers are key so you need to get the
best out of them.…read more

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Stakeholders
Stakeholders any individual or group of people that have an interest in the business or
are affected by the businesses activities on how it operates.…read more

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