Business studies: Unit 1: Starting a business: 1.1

  • Created by: daniella
  • Created on: 31-05-13 11:57

IN THE EXAM: Case Study

  • half the marks for giving theory examples
  • half the marks for relating the question back to the case study


explain two ways in which banks can help a new business such as joseph's (4)

  • banks can provide loans
  • banks can provide advisors
  • joseph would have enough money to start up the stable business
  • joseph would know how to run his business and gain a profit from the advisor
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What is an entrepreneur?

A entrepreneur is someone who is will to take the risks involved in starting a business. Entrepreneurs believe that the rewards of starting a business are worth the risks and costs involved.

What is sacial enterprise?

A social enterprise is a business that is set up to help rather tahn to make a profit

What is market research?

Market research is the process of gathering, analysing and presenting data relevant to marketing.

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What is primary market research?

Primary market research involoves gathering and analysing marketing data that has not been collected

What is secondary market research?

Secondary market research involves gathering and analysing marketing data that has been collevted already.

What is market share?

Is indicated by the sales of the one product compared to the total market sales.

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What is a franchise?

a franchise occurs when a franchisor sells an existing business idea to a franchisee.

A Franchise allows a small business to use a well known company’s trade name and sell its product. In return to for being allowed to sell its products and use its name the small business must pay the well known company a fee and a share of their profits.

What is a franchisee?

a franchisee is the buyer of a franchise.

What is a franchisor?

A franchisor is the seller of a franchise

What is an objective?

An objective or aim is a target that is set for a business to achieve

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What is public sector organisation?

Public sector organisations are owned by the government.

What is the private sector organisations?

Private sector organisations are owned by individuals

What are stakeholders?

Stakeholders are individual and organisations that are affected by and affect the activities of a business

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What is a business plan?

A business plan is a document setting out what the business does at present, plus what it intends to achieve in the future and how this will be accomplished. The plan will include marketing and financial plans.

What is business planning?

Business planning is the process of producing a business plan.

What is a risk?

A risk is the possibility of something going wrong.

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What is a partnership?

A partnership is formed when two or more people set up in business together

What is a deed of partnership?

A deed of partnership is an agreement between partners that sets out the rules of the partnership, such as how profits will be divided and how the partnership will be valued if someone wants to leave.

What is a company?

A company is a business that has its own legal identity. It has its own legal identity. It can own itens, owe money, sue and be sued.

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What is unsertainty?

Uncertainty is something that we cannot be sure will happen

What is a sole trader?

A sole trader is an individual who sets up in a business on his or her own.

What is unlimited liability?

Unlimited liability occurs when the personal possessions of the owners of the business are at risk if there are any problems. Ther is no limit to the amount of money the owners may have to pay out.

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1.1: Reasons for starting business

Finantial reasons

  • they want to keep all the profits for themselves: rather than for oners who keep the profits
  • they need a job: and start ing their own business is one way of making sure that they are emplayed and ,hopefully, that they earn money

Personal reasons

  • they want to be their own boss INDEPENDANCE:
  • they have an interest or hobby and this grows into a business
  • they want to prove something to themselves

To help others

  • they want to provide a service for others
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1.1 Types of businesses

A new business?

New businesses are set up by entrepreneurs. There are both risks and benefits involved in setting up a new business.

what is a business?

a busines is any organisation that makes goods or provides services. they could be their to make a profit, or to just to help people

what does a business do?

Businesses exist to provide goods or services.

what are goods?

goods are physical tangeable products such as burgers, and car

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1.1 Types of businesses

what are services?

services are non-physical products such as hairdressing. the majority of businesses are very small and operate in this service sector.

What is a business start up?

a new firm operating in a market for the first time.

Give an example of both a service and a good:

-a machanic that includes part in the cost

- a resturant where we may  choose to go in because of the atmosphere and environment and to be waited (service) as well as the food (goods)

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1.1 Types of businesses

How are businesses classified- by product / service:

1.) the primary  sector:

-Made up of organisations that are at the first stage of production and use raw materials.  THINK NATURAL

give examples of these:

-Farms oil explorations companies

-fishing fleets

-primary businesses

-metals and coal mined

-wood from trees

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1.1 Types of businesses

2.) the secondary sector:

-Made up of organisations that are at the second stage of the productions process. they are involved in using prinmary resources and converting these into products


-building houses, bridges roads ect.


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1.1 Types of businesses

3.) the tertiary sector:

-Made up of orgainisation that provide servies


-estate agents

-delivery firms

-health care




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1.1: Sources of business ideas

  • People might decide to start a business first then think about the type of business
  • People might have a idea first then decide they want to set up a business
  • Personal experience
  • Observation - gap in market
  • Observation - growing trend
  • Existing ideas that work - the gap in the market could be that there are none in an area (eg. an idea that exists in America could be set up in England)
  • Buying an existing idea and business - franchise
  • EXAMPLES: Clarke Shoes - Domino's Pizza - Coffee Republic - Pizza hut - Thorntons - Coffee Republic
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1.1: Looking for a gap in the market

How can the size of market be measured?

  • the volume of sales (number of items sold)
  • the value of sales (the amount of money that is being spent of these products by customers)

What must you consider:

  • whether or not the idea is likely to work
  • key features of the market
  • different types of potential customer
  • competitors
  • what trends might be occuring - eg. volume and value of sales
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1.1: Looking for a gap in the market

What are the market trends that entrepreneurs might look for?

  • is it growing? - security - more opportunities - more customers -look at the size of the market
  • EXAMPLES: Online films - Online music -  Energy saving lightbulbs
  • are parts of it growing?
  • EXAMPLES: types of video games - genres of film
  • competition? - how does yours differ - how will yours be above the rest - how good are their sales for the type of business their in
  • EXAMPLES: there are loads of cafes
  • is a niche emerging? - is a smaller part of a bigger market

What is a niche?

is a smaller part of a bigger market

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Revision cards on the main topics. Many definitions that students could use to create their own revision materials.

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