Business Studies AQA - Unit 1 Starting a Business

Business Studies AQA - Unit 1 Starting a Business

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  • Created by: Demi
  • Created on: 20-05-12 19:54

What is a Business?

Definition: An organisation that provides goods and services to customers who want and need them.

Goods: Tangiable Items (televison)

Services: Activities that a business' do (hairdressers)

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Defintion: A marketing arrangement that allows a business to trade under the same name and style as an exisiting business.

A franchisor is the owner of the established business that offers the grant.

A franchisee is the is the person who takes the grant.


- No industy expertise required

- Easier to build customer base

- Franchisor provides key equiptment


- Franchisee has to pay substanial inital fees and ongoing royalties

- Restrictions on marketing activities

- There is a risk that the franchisor will go out of business

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Business Aims and Objectives

Specific Measurable Achievable Realistic Time-bound


- To survive

- Earn a profit

- Sell nto a large enough market

- Personal Wealth


- More control over working life

- Want to use skills

- Personal satifaction

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Business Planning

Defintion: a written document that describes a business, it's objectives, it's strategies, the market it is in and it's financial forecasts.


- Investors can understand how the business is run.

- Focus' on the business idea

- Provides a logical structure to the business


- The market could change

- Doesnt take the unexpected to account.

Main sectors of a business plan: Aims, Objectives, Market Environment, Competition, Product/Service, Marketing, Distribution, Funding, Forecasts.

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Defintion: an individual who owns and operates their own business and who has unlimited liablitiy.

Unlimited liablity means that the owner has a legal obligation to pay for losses made by the business.

Oppertunity cost: passing up the next best choice when making a decision.


- Profi 2

-Tax Advantages

- Flexible


-Unlimited liablitiy 

-Long Hours

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Definition: a group of people who come together to share workload and responsibility of running a business. Maximum:20 Minimum:2

The deed of partnership states: equal ownership, equal management, equal share in profits.


-Extra Capital

-Easy to set up

-Shared liability


-Lack of continuity

-Unlimited liability

-Decision making more complex

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Private Limited Company (LTD)

Definition: a type of company that offers limited liability to its shareholders but that places certain restrictions on it's ownership.

Only family and friends can be shareholders in a private limited company.

The legal protection to the shareholders under which the financial liability of each shareholder for the company's debts and obligation is limited to how much they invested.


- Unlimited liability

- Continuity


- High administration costs/ corporation tax

- Dilutes ownerships

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Definition: the desire to do something.

Monetary techniques: bonus', commission on items they sell,piece-rate-pay.


Loyal Staff 


Less profit

Non-monetary techniques: job enlargement, job enrichment, empowerment.


Doesn't cost the owners


Might not motivate

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Fixed costs: don't vary with output (e.g. rent, wages, insurance, software)

Variable costs: costs which change as the output (e.g. raw materials, stock)

Loss: when total costs are more than total revenue.

Cash flow: movements of cash into and of a business

A cash flow problems arises when a business struggles to pay its debt on time.

To improve cash flow:

-cut costs by identifying savings in in non-essential costs.

-cut stocks by reducing cash tied up buy buying and holding stock.

-delay payments to suppliers

-reduce credit period offered to customers  

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Really helpful Thank you:)

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