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Tuesday, January 5, 2010

UNIT 1 REVISION

Starting a business

KEY POINTS:

  • Enterprise
  • Enterprise skills
  • Entreprenurs
RISK&PROFIT

  • lack of finance
  • poor infrastructure
  • skills shortages
  • often high profits to be made from a business idea that competitors are afraid to exploit.

OPPORTUNITY COST = THE NEXT BEST ALTERNATIVE FORGONE

Sources of business idea

4 major resources:

  • spotting trends
  • niticing something that is missing from the market
  • copying ideas
  • taking a scientific approach

Identify of a PRODUCT & MARKET NICHE

FRANCHISING

- The the business(the franchisor) gives the right to supply its product or service to another business(the franchisee)

-It is important to know the benefits and drawbacks to be the franchisee/franchisor

PROTECTING A BUSINESS IDEA

  • Cory right
  • Patents
  • Trademarks

Transforming resources into goods and services

Inputs = factors of production:

  • Land
  • Labour
  • Capital
  • Enterprise

Inproving effeciency:

  • using recyclale/renewable resources
  • greater traning of the workforce
  • imcreasing the level of capital equipments
  • improvements in the entreprenuerial skills

PRODUCTION

-the process whereby resources are converted into a form that is inthended to satisfy the requirements of potential customers.

TRANSFORMATIO PRCESS: INPUTS TO OUTPUTS

ADDING VALUE

-The process of increasing the worth od resource by modifying them

VALUE ADDED

-Sales revenue minus the cost of bought-in materials, components and services.