Business unit 1 - section 1 : starting a business

1.What is an entrepreneur and name some characterisics.

Individuals who take the risk to create or start a new business project,risk taker,passionate,creative,

2.Why become an entrepreneur and what skills do you need?

Feeling of satisfaction,be your own boss,for the rewards,have more controll. hard working, have a vision, risk taker, well rounded, work well with people, innovative.

3.What is opportunity cost?

The benefit from the next best alternative that has been given up.

4.Why do governments like entrepreneurs and how can they help them?

Create jobs,earn money towards economy,pay taxes,create competition. Business link,acess to useful advice,legal protection,funding,make it easier for small businesses to enter the market.

1.Where is the best place to get a new business idea from?

own experience,hobby or intrests,buy the rights to sell and exisitng product,friends and family,gap in the market.

2.What are the 3 ways of protection and describe each of them?

Patent= for new inventions,legal protection for up to 20 years- the renew,take people to court-time consuming,pay for the right to use it. Trademarks= protects a sign or symbol that distinguishes you from other competitors- must be renewed every 10 years. Copyright= protects creative or artistic work, automatically have it when you create, others have to pay to use it.

3.Why protect your idea and what makes a good business idea?

Why protect=no subsitutes,charge more,earn money,have more costomers.Good idea= meets costomers needs and need of firm,do you have the apropriate facilitiesm production, demand for product, can you benefit from providing it, easily achieveable.

1. Whats is a franchise and how do they work?

occurs when a franchisor sells the rights to use or sell his or her products to a franchisee. works by franchisor sells the rights to the product in return for some fee and a % of turnover. franchisee recieves the right to the name and systems used by franchisor. eg raw materials an dtraining.

2.Advantages of a franchise:

Support from franchisor with decisions,pricings,suppliers and planning ahead. less risky as it has past data which you can analyse to determine if it has been sucessfull or not,may have more barganing power because you are a chain rather than on your own. may have cheaper start up costs. allready a reputable business. can grow fast, partly funded,more motivated managers running their own stores.

3. disadvantages of buying a franchise?

costs money,lined to other franchisees so if their qualioty falls yors will fall too-affect overall sales.

4. franchisor benefits=  grow fast,motivation,get a % of sales, disadv= reputation at stake

1. What is a busniess plan and its purpose?

a document that outlines the strengths,aims and strategies of a business. nature of the business,product it offers,nature of the market,objectives and aims,strategy,approach to marketing,founders,forecasts of finance. benchmark, show to banks for loans and potential partners.

2.where do you get the information from?

own research(primary,secoandary), frinds or family, other businesses,government statistics, danger of research being bias, professional advice from banks or conultants, talk to others in the industry.

3.What are the possible strengths and weaknesses of a business plan?

strengths: good amount of detail, easy to read and understand,clear predictions Weaknesses= forward looking and may be optimistic,inexperienced, does not take into account changes in the economy and current tends,

1.What is market reasearch and what is it used for?

The process of gathering,analysing and producing data relevant to the marketing process. use for= identify market opportunities,identify current trends and costomer needs, asses alternative options open tio the business, asses effectiveness of different marketing actions.

2. What is primary and secondary makrte research?

Primary= gathers dats for the first time, your own findings example- focus groups or questionaires can be expenisve and time consuming.. Secondary= uses data that already exists example from other businesses cheaper and less time consming, however can be out of date or unreliable.

3.What is sampaling and name the types of sampaling and describe them

sample= a group of people or items selected to represent the population as a whole. Random sample= all members of target population have an equal change of being selected. uota sample= when interviewers select people within a target population who meet set criteria.- approach people ane see if they match criteria.stratified sampling= based on particular proportions- used when the taregt population has a particular characteristic that you want to reflect in your sample.

4.what factors will you have to consider when choosing a sampling method?

time avalible,your knowlage of taregt population, the extent that the target population has clearly differentiated gorups of buyers.

5. what is quantitaive and qualitative market research?

Qualitative= based on peoples thoughts and opinions- interviews or focus groups. aims to examine why costomers behave ion certain ways and what they think of a product compared to another and what they want from a product. larger groups give more reliable data.Quantitative=  Based on facts and figures, relatively large samples and is therfore statistically valid. findings expressed in numerical terms or from other businessed.

6. What are the problems with start up market research?

little money alvible so can limit the amount and type of research taht you do, may niot be able to afford market research experts, some people prefer to use the money towards the produc rather than the research.- relying on gut feeling- can be risky.