UNIT 1 AQA BUSINESS STUDIES

Business revison

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FRANCHISES

Characteristics

- Franchisee puts a sum of money to buy the right to trade under the franchisor's name.

- royalty annual fees for the franchisor

- training and support for the franchisee is availiable

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ADS for Franchisee

its an already known business

training and support given

theres 'less risk'

cheaper than setting up own business

DISADS for Franchises

responsibles for debts

royalty fees

unlimited liability

not your own business

lack of freedom

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Business plan

the plan

- introduction (basic details)

-business idea (whats the proposition going to be)

-management & personal (role of management)

-the marketing plan (USP, demand, potential consumers)

-production plan (day-to-day activities, suppliers, raw material)

-financial plan(costs, revs, cash flow, budgets rent, invoices, business cards etc)


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Ads

- Provides focus

- Logical structure

- helps test financially

Dis ads

- Time consuming

- long enough for a purpose

- not to over optimistic

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Market research

Primary research -involves the collection of data that does not already exist (field research)

Secondary research - Market research that already exists

Quantitative research - research that includes numeric data - statistics

Qualitative data - research that includes words - interviews etc

Sampling

random -total population has a chance of being picked

stratified random -interested in particular market segments eg, females in their 20's

quota sampling - exact sample proportions in market segments (not random)

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Factors influencing sampling methods

the nature of the product

the risk involved

finance available 

the target market

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Ads of market research

helps to identify the wants and needs of customers

allows the business to design & vary its marketing mix

swifter response to changes in customer needs

spot a 'gap in the market'

greater confidence

wasted/ failed products can be reduced

Disads

can produce irrelevant information 

unrepresentative

not 100% accuracy

not respondents true view

secondary data can be out of date.

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Understanding markets

factors influencing demand:

price

income

tastes & fashion

social and demographic

government activities

marketing& advertising

competitors

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Types of markets

Physical market -bring together buyers and sellers of particular items e.g. sugar canes, beet.

National market -buying on behalf of the country e.g. education, health

Local market -buyer & seller exists  and bought together within a small area e.g. hairdressing, pubs, off licenses. 

Electronic - linked by some form of electronic infrastructure enables them to engage in trade, e.g. Ebay, amazon

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Legal structures

Sole trader

Ads

-Easy to set up

-complete control

-keep all the profits

- own boss

-privacy

Dis ads

-unlimited liability

-limited access to capital

-pressure of responsibility

-lack of continuity

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Partnerships

Ads

-Extra finance capital

-joint responsibility

-shared workload

Dis ads

-Unlimited liability

-limited access to capital

-shared profit

-disagreements

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Sources of finance

Ordinary share capital - sale of shares in the business. This allows them to raise large sums of money. But the cost of planning and implementing a share issue can be expensive, and time consuming.

Bank Loan - banks want to know the risks involved, repaid on a monthly basis over a number of years, it can be medium - long term and incurs high interest charges - either fixed or variable, easy to access but banks want security so assets maybe be used.

Overdraft - Short term bank loan, able to account more money than it has deposited, used as cover cash shortages, interest is paid only when the account is overdrawn, flexibility, high rate interest.

Venture capitalists - finance providers, invest in smaller, very risky businesses, early stage of a enterprise, share ownership in business

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