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Business 1 - Coggle Diagram
Business 1
.5 - Understanding external influences on business
Legislation and business
The economy and business
Technology and business
External influences
Business stakeholders
.2 - Spotting a business oppourtunity
Market segmentation
Competitive environment
Market research
Customer needs
.3 - Putting a business idea into practice
Business revenue, costs and profits
Cash and cash flow
Business aims and objectives
Source of finance
.4 - Making the business effective
Business location
The marketing mix
Options for start-up and small business'
Business plans
.1 - Enterprise and enterpreneurship
Risk and reward
Risk
Risk of failure
A major cause of business failure is a lack of cash flow :
A business can face serious problems if they don’t have enough money coming in to cover costs.
failure to make enough money to survive and being forced to close.
poor revenue, which can be caused by:
a lack of market research to find out what customers want
running out of raw materials
poor management, with not enough thought given to the consequences of decisions on how to manage the business
Lack of security
Starting up a new business takes time and energy, so entrepenurs normally quit thier previous job
lose security of a regular income
They may have to work long, irregular hours, and may find it difficult to take holidays in the early days of running a business.
Financial loss
need money to set up a business, whihc may be from a loan, investor or their own money
The business will then need to ensure that profits are sufficient to pay this money back
If the business is not profitable then the entrepreneur, and any lenders, risk losing the money.
To minimise risks
carrying out market research to find out what customers want
writing a business plan to identify potential problems
ensuring that there is sufficient money available
Reward
Independance
may not want to work for someone else
having the independence to make their own decisions and control their own working hours can be sufficient reward for some entrepreneurs.
Business success
seeing their ideas become popular
a growing business
a positive reputation
winning business awards
becoming a well-known business person
Profit
rofits can be put back into the business, to help it survive and grow.
provides an incentive for an entrepreneur to start a business, if they believe they can earn more money than they would if they worked for someone else.
The role of business
Producing goods and services
Services
provide services to customers, who have access to them for a period of time
Examples
hairdressing
train journeys
internet access
Goods
are tangible items that can be used and stored.
make goods and sell them to customers, who then own them
Examples:
computers
food
clothes
The role of entrepreneurship
businesses need to organise resources and make decisions about how much risk they are willing to take.
making decisions about what to produce or provide using the resources available to them
Resources:
capital
labour
land
Dynamic nature of business
Why do new business ideas come about
Products and services becoming obsolete
products can become otudated due to the rise in new products
other causes are changes in economy
increased wealth will decrease needs for
inferior
products
Technology
causes ideas for new products
Computers, smartsphones,didgital cameras
constantly allows new products to be produced and launched for sale
Changes in customer wants
Fashion and consumer tastes are always chaning so to adapt to these, business have new ideas suitable for such trends
Why do businesses exist
They think they can offer a better service than is given
To fill a gap in the market
To meet a specific customer need
To repsond to new customer needs
To provide a goods/ service