Starting A Business

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  • Created by: Krishna_
  • Created on: 10-12-16 15:59
Aim
A target for the future that can be quite vague - e.g. survive, customer satisfaction, sales growth etc.
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Objective
A clear target to acheive over a certain period of time - e.g. increase profits by *%, gain * new customers, *% positive customer feedback
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Business Plan
A plan for your business which provides focus on the business idea and gives a logical structure to the aims and objectives
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Information included in a business plan
Location, Competition, Products/Service, Aims, Objectives, Resources, Market environment
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What's a business?
Any organisation that makes goods or provides service
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Reasons for starting a business
Escape a boring job, Make a profit, To be independent, To get experience, Fulfil a dream etc.
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What's enterprise?
Describes an ambition that's the creation of business
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How to find a gap in the market
A gap in the market can be found by market observation and market mapping. Market observation is looking at the current market and identifying a gap (niche market). Market mapping is drawing a diagram of the products in the market, low/high prices
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What's Mass Market?
When a firm aims its product/services at most of the market. Customer needs and wants are less specific, e.g. Walkers, Pepsi, Nike etc.
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Advantages of Mass Market
-It's for everyone so no one's restricted, -Most of the products are affordable which means more of the products are sold, -Takes advantage of economies of scale because they're producing in mass (Batch Production)
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Disadvantages of Mass Market
-It could be really different to the public's needs, - Competitors might do the same, -There's a lot of competition which means that prices need to be lower, -You can't customise the product
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What's Niche Market?
When a firm focuses on a specific segment of the market which the major competitors arn't concerned with, e.g. Versace, Ferrari, Louis Vuitton etc.
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Advantages of Niche Market
-It might get a lot of attention as it's something different, -It might add to the speciality of the product (an extra feature), -It can be sold at a high price, since it's something not everyone can have, -There isn't a lot of competition
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Disadvantages of Niche Market
-The 'specific segment' may be unwanted, -They target fewer people so they might no make a profit, -The idea can be copied, -Over-dependent on a 'single market'
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Stakeholder
Someone who's affected by the business - If a shareholder owns more than 51% they are called a Majority Shareholder
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Workers - Influence in the business
They are affected by the business as the profit of the business affects their salaries. They affect the business by their efficiency in the job and tasks they do everyday
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Managers - Influence in the business
They are affected by the business as they have to make necessary decision which means pressure. They affect the business by their decisions (what products/services should be offered) which could result in a profit or loss.
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Owners - Influence in the business
They are affected by the business as the succes of it determines the profit or loss they get. The business affects them as they have a big say in the aims and are in charge of most of the decision making
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Customers - Influence in the business
They are affected by the business as they want to get quality products/service, and will go to a competitor if their needs aren't met. They affect the business as they decide to continue buying product/service provided
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Suppliers - influence in the business
They are affected by the business as the bigger the business gets the more goods are in need. They affect the business as they can change the prices for orders and the orders might not arrive in time leading to a loss.
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Government - Influence in the business
They are affected by the business as they receive corporation tax and need to make sure the business is within the law. They affect the business as they can introduce new laws like min. wage and corp. tax
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Local Community - Influence in the business
They are affected by the business as it means that more people are employed and people are getting access to a product.service close to them. They affect the business as they could petition against new developments or complain for noise/air pollution
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Rewards received when opening your own business
Flexible hours, tax benefits, Job security, Profit, Satisfaction, etc.
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Measuring success
One way to measure success is to calcultate profit. Profit is calculated by taking away costs from Revenue. Revenue is sometimes referred to as Turnover.
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Risks when opening your own business
Financial risk, Management risk, Marketing risk, Product risk, Failure, Abandoning a steady wage
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Limited Liability
Investors only lose thier investment if the business fails
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Unlimited Liability
Owners are personally responsible for business debts
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What's a Sole Trader?
One person owns the business and is fully responsible, may employ people to work for them - e.g. Hairdresser, Photographers
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Advantages of a Sole Trader
Easy to set up, You're in control, Don't have to pay wages, Low accoounting costs
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Disadvantages of a Sole Trader
No one to consult, Long hours, Unlimited liability, Solely Responsible, Very few holidays
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What's a Partnership?
A business owned by 2-20 people where the partners share the proft and decision making - e.g. Hp, Google, Twitter
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Advantages of a Partnership
More knowledge, Better management, Easy to set up, Self-employed, Bigger chance of raising funds
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Disadvantages of a Partnership
Unlimited liability, Breached of trust, Taxation, Costly if a partner leaves
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What's a Private Limited (Company)?
Owned by private owners and sells shares to chosen people only such as friends and family - e.g. Primark, Specsavers, Royal Mail etc.
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Advantages of a Private Limited
Limited liablity, More people means more capital, Min. amount of shareholders
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Disadvantages of a Private Limited
Corporation tax, More shareholders mean limited growth, share prices aren't quoted daily
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What's a Franchise
An organisation (Franchisor) that sells rights to the Franchisee who then trades in the Francisor's name, e.g McDonald's, Subway, KFC etc.
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Advantages of a Franchise
Guranteed profit, Not risky, Limited liability, Don't need a lot of ideas
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Disadvantaged of a Franchise
You can't make a lot of decisions and You can't use your own ideas
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Factors that affect location
Costs, Labour, Entrepreneur's lifestyle, Competition, Infrastructure, The market
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Other cards in this set

Card 2

Front

A clear target to acheive over a certain period of time - e.g. increase profits by *%, gain * new customers, *% positive customer feedback

Back

Objective

Card 3

Front

A plan for your business which provides focus on the business idea and gives a logical structure to the aims and objectives

Back

Preview of the back of card 3

Card 4

Front

Location, Competition, Products/Service, Aims, Objectives, Resources, Market environment

Back

Preview of the back of card 4

Card 5

Front

Any organisation that makes goods or provides service

Back

Preview of the back of card 5
View more cards

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