business unit 1

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What is the purpose of a business?

to provide goods and services

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MARKET RESEARCH

primary research-collecting data that did not exist before e.g surveys, focus groups, questionaires

secondary research- already existing data e.g google, newspaper, internet, goverment statistics

BENEFITS OF PRIMARY- accurate, up to date,direct customer contact

Benefits of secondary- more general, less time consuming

QUALITATIVE DATA-info about opinions, judgemet and attitudes

QUANTATIVE DATA- data that can be expressed as numbers

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market map

whats a market segement?

a group of buyers with similar characteristics or interest e.g age 6 or gender female

Benefits to a business of market segementation?

-meet specific customer needs -focus on a specific group of customers -develop a unique brand image -differentiate their products from competition

What is a market map?

diagram used to position and compare products in a market and identify an unmet needs also known as a gap in the market

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competition

WAYS TO COMPETE

-better design

- higher quality

-strong brand image

-wider product range

- more enjoyable experience

WHATS A BRAND

named product which customers can identify a range of products under,customers can also see it as being different from other products. A company can charge higher prices if under a brand and brand images are seen as beint trusted.

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adding value

HOW CAN A BUSINESS ADD VALUE

-branding

-better design

-improve quality

-greater speed of service

-unique selling point

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why is adding value so important

higher added value, the sooner costs can be paid off ad quicker a business can make profit.  Higher value products will mean the business will be more likely to survive.

UNIQUE SELLING POINT- making your product stand out from competitiom e.g for a sandwhich could be unique combination of ingredients

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FRANCHISING

FRANCHISOR- business that gives franchisee the right to sell a named product or service under the brand

FRANCHISEE-a business which agrees to manufacture, distribute a named product under the rights of a franchisor

BENEFITS OF A FRANCHISE

-higher chance of survival

-training throughout

-establised customer base already

-marketing costs covered bt franchisor

-brand image and reputation already established

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Drawbacks to a franchise?

- expensive start up costs

-royalty payments

-complicated application

-lack of control and flexibility to give do your own choices and decisions

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Enterprise

WHATS AN ENTREPRENEUR?

person who owns and runs their own business and takes risks

WHAT ARE ENTERPRISE SKILLS?

-risk taking-willingness to undertake a new venture-showing initative

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Thinking creatively

Deliberate creativity?

- creating lists

-mind mapping/ brain storming

What is blue skies thinking?

-coming up with as many ideas as possible too solve a problem

what is lateral thinking?

- thinking differently to try and find new unexpected ideas

DEBONOS SIX HAT THEORY

-emotions

-positives - negatives -facts-how to get around a prob -thinking

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invention and innovation

invention- identifying new products and new ways of making products

innovation-process of transforming new ideas into products thatareready to be sold to a customer.

PATENT-right ofownershp of an invention, design or process when registered with goverment

COPYRIGHT- legal ownership of material such s books or cds meaning they can not be copied by someone else.

TRADEMARKS- LOGO Symbol of a product which cant be copied by someone else.

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costs

fixed costs-dont vary with the output of a business e.g salaries

variable costs- change directly with number of products made e.g raw materials

HOW CAN YOU INCREASE PROFIT?

-lower variable and fixed costs

-increase sales price and quantities of sale

WHATS THE ISSUE WITH A LOSS OF PROFIT?

-unable to repay loans

-unablet to pay bills e.g wages

-cant survive

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cash flow

cashflow-money flowing in and out of a business on a day to day basis

WHAT IMPACTS CASH FLOW?

-change in stock levels

-change in costs

-change in sales and demand

HOW TO IMPROVE CASH FLOW?

-increase revenue by improving sales

-negotitate lower prices with suppliers

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WHats the purpose of a business plan?

- persudade a bank to give you a loan

-identify customer needs

-minimise risk

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0btaining finance

long term sources of finance?

-loans

-personal saving

-profit

-mortgage

-grants

-share capital

SELLING SHARES

a share is a part ownership in a business, shares are sold to raise capital and are entitled to any profit generated (only limited comapanies can do this)

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short term sources of finance?

-trade credit - bank over draft -credit cards-

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limited liability

UNLIMITED LIABILITY

-solde trader (business owned by one person) - responsible for any debts -keep 100% profit -100% control

LIMITED LIABILITY

-privated limited company - any debts belong to the business and not the owners, they can only loose the amount they have invested-profits are shared - safer as more chance of survival meaning less risk

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legal and tax issues

WHY HAVE LEGASLATION?

-goverment can keep track of business activity

-taxes can be collected-protrct business from illegal activity

WHAT ARE THE LEGAL REQUIREMENTS OF A BUSINESS?

-register and trade under a unique name -keep records of sales and purchases-register with customs - pay appropriate level of tax

WHAT ARE THE TAXES ON A SMALL BUSINESS?

-VAT - income tax -national insurance -corparation tax

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customer satisfaction

-dispatch orders quickly

-polite and friendly

-responding immedietly to any complaints

-being conveniet

providing a personal service

-going that extra mile

-being 100% accurate

BENEFITS OF CUSTOMER SATISFACTION?

-repeat purchase -loyalty- can charge a premium price- better business reputation

HOW TO KEEP REPEAT PURCHASE?

-lower prices than competitors-easy and convenient service- promotions and special offers

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motivation

-paying a fair and competitive wage

-providing good working conditions

-providing perks e.g cars

-encourage team work and relationships

-training and nuturing staffdevelopment

EMPLOYMENT LEGISLATION

-recruitment-no discrminiation on sex, age, disability

-pay equally

-working hours must be fair and safe

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stake holder

individual or group that is affected or interested by a business

-owners

-managers

-local people

-competition

-goverment

-suppliers

-workers

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the end

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sdaD

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