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.