Business End Of Year Exam Prep

Entrepreneurship 

An entrepreneur is someone who starts their own business and is generally successful. 

Examples of entrepreneurs:

• Steve Jobs 
• Bill Gates
• Richard Branson 
• Alan Sugar

Why do people start their own business:

• To be independent- To be your own boss
• To get profit
• To be unique- creating something different
• To express ideas
• To fill a gap in the market
• To manage others
• To enjoy
• To develop a new product

The skills entrepreneur's need:

• Confidence
• Organisation
• Listening 
• Leadership
• Experience 
• Creative thinker
• Risk taker (calculated risks)
• determination 
• Thinks outside the box
• Ruthless
• Patience
• Instinct 
• Fairness 

Business Objectives

Targets allow businesses to keep track of their progress.

Objectives are general statements e.g. "To survive"

Effective objectives are SMART Targets (Specific Measurable Achievable Realistic Timed) e.g. "To make £25,000 profit in the first 6 months"

Sole Trader

A sole trader is an individual who owns and starts up their own business.

Advantages:

• You gain all the profit
• more independency
• Be your own boss
• you make all the decisions

Disadvantages:

• More Work
• Less money input at start-up
• More pressure
• cannot rely on others for help

Examples of sole traders:

• Alan Sugar
• Steve Jobs
• Richard Branson

Partnership

A partnership is when 2 or more people start up their own business (usually 2-20 people).

Advantages:

• Less Work (Share between each other)
• More money input into start-up
• Less pressure
• rely on other people for help
• go to different countries (business growth)

Disadvantages:

• No independence
• share profit
• decisions will have to be agreed on
• arguments
• others can buy you out

Examples of Partnership: 

• Bill Gates and Paul Allen (Microsoft)
• Sam, Jack, Albert, and Harry Warner (Warner Bros.)
• Bill Hewlett and David Packard (Hewlett Packard)

Limited and Unlimited Liability

Limited liability means that if the business fails then the owners only have to lose what they have already invested. Their liability is limited to the investment they have already made.


Unlimited liability is where you cannot pay of your debts and the bank takes away your possession to compensate for the debts.




What is a PLC?


A PLC is a Public Limited Company. A Public Limited Company is a company that has shares which can be bought by anyone that is over the age of 18 via the Stock exchange. it can be bought by competitors and all the shareholders can contribute to the decisions of the company. The shareholders get paid a dividend twice per year if the company makes a profit. It takes a minimum of £50,000 + a maximum of £10,000 of legal fees to start up a PLC.


Examples of PLC:

• Natwest Bank
• Co-operative
• Vodafone
• Tesco
• Barclays

Stakeholders

A stakeholder is someone who is interested in the success or failure of a business and can be directly affected by a business.

There are two types of stake holder groups, Internal and External stakeholders.


Internal Stakeholders-are people within the business. eg. Employees

External Stakeholders-are people outside the business. eg. Government
Some examples of stakeholders:

• Government (external)
• Customers (external)
• Suppliers (external)
• Competition (external)
• Shareholders (external)
• Local community (external)
• Banks (external)
• Pressure groups (external)
• Employees (internal)
• Business owner (internal)

Public and Private sector

Public and Private sectors contains two different types of organisations.
The Public sector is owned by the government.
The Private sector is owned by an individual.
When a public sector company moves into the Private sector it is called 'Privatisation'

Examples of Public and Private sector companies:

• NHS (Public)
• London Transport (Public)
• Schools (Public)
• BBC (Public)
• Bank of England (Pubic)
• Metropolitian Police (Public)
• Private Schools (Private)
• HSBC (Private)
• Natwest (Private)
• McDonald's (Private)
• Holly House (Private)
• London Attractions (Private)
• Heathrow Airport (Private)

Market Segments
Market segment is 

• Gender
• Price
• Interests
• Location
• Religion
• Income
• Size of Household
• Age
• Education
• Occupation
• Social Class
• Ethnicity
• Nationality
• End use (Example work or leisure)

Profit

The positive gain from an investment or business operation after subtracting for all expenses. Opposite of loss.

Profit= Sales Revenue - Total cost

Why is profit important

Profit is important because it is the bottom line of a business. Profit helps grow a business and it makes it's owners become more financially stable. You need profit in order for a business to survive.=


Why is business planning important?

It is important for several reasons. If you are applying for a bank loan, trying to get an investor, or raising money in general, nobody is going to give you the time of day if you don't have your business planned out. How much money you need, what for, your purpose of business, marketing, sales strategy, profit projection, and more. Not only is a business plan designed to help you raise capitol, but it also gives you a road map so you know where you are in building your business. Would you drive across country without mapping out a route, determining the mileage, and calculating how much gas you will need and the cost?

A business plan will not definitely make sure that a business is going to be successful, but it will give the business a higher success rate than without one. The business will have a target and a guild line to what it wants to do and how it will grow in the future.

Franchise

Franchise is a successful business that sells the legal rights to trade under the company's name.


Recruitment is the process of finding and appointing new employees.