F291

Inputs: resources necessary to produce goods and services.

• land
• labour
• capital
• enterprise

Value Added : the difference in price between the cost of materials and the cost of the product.

Outputs: the goods and services produced from utilising inputs.

Market: a place where buyers and sellers come together to exchange

• consumer durables
• consumer non-durables
• services
• industrial

Functions of a business: departments or divisions of the business

• Marketing
• Finance
• Human Resources
• Production

Constraints on Businesses:

• competition 
• legislation
• the economy
• taxation
• inflation
• social and environmental issues

Purposes of business:

• source of revenue
• source of employment
• dividing the balance of payments
• adding value

Individuals or groups who are affected by the operation of a business, or influence the operation of a business.

• owners
• employers
• customers
• lenders
• suppliers
• the community
• the governement

• taxation
• employment
• increasing exports
• money spent on schools, roads and hospitals

Essential Resources:

• An effective business plan
• employees
• managers
• finance

Other Resources:

• USP
• reliable suppliers
• loyal customers
• effective marketing
• luck

Personal Qualities Needed:

• persistance and drive
• ability to work under pressure
• creativity and imaginiation
• risk-taking
• leadership skills
• energy and enthusiasm
• self-belief and confidence

Reasons for Business Failure:

• failure to seek professional advice
• lack of financial discipline
• insufficient market research
• inability to change

Needed for:

• start up
• raw materials
• everday expenses
• marketing
• expansion

Short term finance: up to 3 years

• overdraft
• short term loan
• trade credit
• debt factoring

Medium term finance: between 3 and 10 years

• medium term loan
• hire purchase
• leasing

Long term finance: over 10 years

• long term loan
• retained profit
• sale and lease-back

Other Sources of Finance:

• governement grants
• venture capital and business angels

Factors Controlling Choice of Finance:

• type and size of business
• security
• internal funds
• existing levels of debt
• relationships with banks
• length of time involved
• current methods used

Recruitment:

Demand for labour -> nature of the job -> job advert -> selection -> appointment -> induction

Internal Recruitment:

• cheaper
• motivating
• fewer and better known candidates
• induction is shorter and cheaper
• can lead to jealousy and resentment
• likely to create another job vacancy

External Recruitment:

• brings new ideas into the business
• offer information from other businesses
• more candidates
• advertisement has to be drawn uo and promoted
• can be demotivating for current employees

Training

On-the-job Training:

• more convenient and less time consuming
• can be organised to fit in with the needs of the business
• can benefit the trainer
• effectiveness depends upon the skill of the trainer
• bad and good habits can be passed on

Off-the-job Training:

• can share problems abd learn others work experience
  
• timings and details are outside of the business' control

Primary Data:

• interviews
• surveys
• observations
• test Panels

Secondary Data:

• company sales figures
• customer data
• competitors
• market research data
• internet
• trade publications
• newspapers and magazines
• government data

Random Sampling: every nth person selected - equal chance

Stratified Sampling: sample based on gender, age, or characteristics

Cluster Sampling: selecting a small group that represents a larger group

Systematic Sampling: sampling by formula

Convenience Sampling: likely to be local of to fit a desired group

Quota Sampling: individuals selected to mirror the total population