What is the purpose of a business?
to provide goods and services
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
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
WAYS TO COMPETE
- 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.
HOW CAN A BUSINESS ADD VALUE
-greater speed of service
-unique selling point
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
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
-establised customer base already
-marketing costs covered bt franchisor
-brand image and reputation already established
Drawbacks to a franchise?
- expensive start up costs
-lack of control and flexibility to give do your own choices and decisions
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
- 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
-positives - negatives -facts-how to get around a prob -thinking
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.
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
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
WHats the purpose of a business plan?
- persudade a bank to give you a loan
-identify customer needs
long term sources of finance?
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)
short term sources of finance?
-trade credit - bank over draft -credit cards-
-solde trader (business owned by one person) - responsible for any debts -keep 100% profit -100% control
-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
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
-dispatch orders quickly
-polite and friendly
-responding immedietly to any complaints
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
-paying a fair and competitive wage
-providing good working conditions
-providing perks e.g cars
-encourage team work and relationships
-training and nuturing staffdevelopment
-recruitment-no discrminiation on sex, age, disability
-working hours must be fair and safe
individual or group that is affected or interested by a business