Starting up a Business

• Financial reasons
• Personal reasons -- independence of being own boss.
• Help other -- Charities.

Businesses have 1 aim -- to make a profit to survive from.

If it doesn't make profit it goes bust.

Other business aims:

• Try to be the bigger in their market.
• Try to provide the best service possible.
• Focus on expanding the business.

Enterprise involves finding new business opportunities and then taking advantages of them.

It can involve starting up a new business or helping an existing one expand.

A good business idea is when people find gaps in the market (something that isnt already existing.)

A niche market is a small market that provides for customers with a specific need.

Risks

• An entrepreneur needs to gather money to expand a business.
• Often, they use their own money.
• They hope the business will earn enough money back to pay off any money borrowed.
• Good entrepreneurs plan the risks and do research before hand.

Successful entrepreneurs need to have:

• ability to think ahead -- identify opportunities for the future.
• determination -- turns ideas into action.
• networking skills -- identifying people who can provide money.
• leadership skills -- motivate others.
• ability to plan carefully -- lower risk of failure.
• ability to learn from mistake.

Sole Traders- easiest business to start.

Most small businesses are sole traders.

Advantages:

• easy to set up.
• get to be your own boss.
• decide what happens to profit.

Disadvantages:

• long hours.
• unlimited liabilities.

Equal say in business and profits.

Advantages:

• more ideas & more people to share work.
• more capital (money) can be put in.

Disadvantges:

• responsible for other partners.
• unlimited liabilities.
• more disagreements.

Limited liabilities.

• Legal paperwork (memorandum of association) to create a Ltd -- who's the business is and where.
• Article of association -- how it will be run.
• Owned by shareholders.

Advantage:

• limited liabilty.

Disadvantages:

• more expensive to set up.
• legally obliged to publish accounts every year.

A franchise is the right to sell another companies product.

Advantages:

• buying rights to sell an established product.
• benefit from wider marketing.
• franchisor would provide training.

Disadvantages:

• only able to sell the franchisors product.
• have to run the business to the franchisers rules.

Advantages for the franchisor- increased market share without increasing size of own firm.

Disadvantages for the franchisor- if franchisor is poor, it could affect the brand.

• Survival
• Profit
• Growth
• Market share
• Environmental sustainability
• Ethical considerations
• Customer satisfaction

 Objectives help businesses achieve their aims.

Influence of stakeholders:

Internal- inside the firm such as owners and employees.

External- Outside the firm such as customers, suppliers, government and the local community.

All types of stakeholders:

• Employees are interested in job security and promotional prospects.
• Suppliers are interested in the firm doing well so they can purchase more supplies.
• Local community are interested in jobs and sponsership but could suffer from noise and pollution.
• Customers want high quality product at low prices.
• Government are interested in the firm making profit.

• Personal details of the owner. (CV)
• Mission statement
• Objectives
• Product description
• Production details
• Staffing requirements
• Finance