Start-Up costs are the things you are going to need to get the business giong i.e. furniture, IT, stock / materials etc. These are mainly one off payments that do not come again.
Running Costs are the day to day costs of running the business usually calculated in terms of monthly or annual costs. These costs will be for things like power, staffing, materials etc.
Fixed and Variable Costs
Fixed costs are ones that do not vary with sales. For example, one of the fixed costs of a high street shop is the rent paid for the property. The rent is still the same whether the shop sells one item or hundreds.
Variable costs are ones that vary with sales. For example, imagine that a shop buys in books for an average price of £5 each. It then sells the books for a higher price. For the shops the variable cost is £5 per unit.
Heres a quick video clip on Fixed and Variable costs:
Wednesday, 28 December 2011
Wednesday, 14 December 2011
Calculation For Market Share
Sales of product
x 100
Total Market Sales
Example:
12'500
x 100 = 5.3%
234'000
5.3%=Market Share.
The company with the most Market Share is called the Market Leader.
x 100
Total Market Sales
Example:
12'500
x 100 = 5.3%
234'000
5.3%=Market Share.
The company with the most Market Share is called the Market Leader.
Market Research
Market Research is the process of gathering, analysing and presenting data relevant to marketing. It is important to a business when starting up because it tells them what type of product or service they should make. Market Research is measured by the volume of sales, (number of items sold) or the value of sales.
Primary Research- primary research is also known as "Field" research. The data is new and has not been collected before. It can be done by someone in the business or pay another business to carry it out for them. Advantages of Field research is that you research what you want, it is also new. Disadvantages of Field research is that it is very time consuming, and it costs a great deal of money.
Secondary Research- Secondary research is also known as "Desk" research. The data is collected from sources such as the internet. The data has been gathered before. Advantages of Desk research is that you don't have to find it yourself because it has already been collected. Disadvantages of Desk research is that it can be outdated and it is not always relevant to what your looking for, also it has to many sources and they could be incorrect.
Primary Research- primary research is also known as "Field" research. The data is new and has not been collected before. It can be done by someone in the business or pay another business to carry it out for them. Advantages of Field research is that you research what you want, it is also new. Disadvantages of Field research is that it is very time consuming, and it costs a great deal of money.
Secondary Research- Secondary research is also known as "Desk" research. The data is collected from sources such as the internet. The data has been gathered before. Advantages of Desk research is that you don't have to find it yourself because it has already been collected. Disadvantages of Desk research is that it can be outdated and it is not always relevant to what your looking for, also it has to many sources and they could be incorrect.
Why do businesses fail? Also How can the size of a business be measured?
Reasons for business failure:
How to measure the size of a business?
- Lack of money
- Debt (owing money) ->Unlimited liability
- No profit
- Weak idea
- Gap already filled in the market
- Competition
- Market has changed
- Underestimated the difficulty
- Recession
- Product does not sell
- Lack of public awareness (Advertising)
- Product to similar to another product (competitor)
- Location
How to measure the size of a business?
- Number of employees
- Number of stores (outlets)
- Amount of profit made
- How big the stores are
- Number of different products they sell
- Publicity
- Amount of advertising
- Number of shareholders
- Local, national, international (multinational)?
- Turnover
Difference between a Product and a Service. Also What is a Social Enterprise?
Product- A product is something that is tangible, something that is made and you can physically touch. An example is "iPod"
Service- A service is something you can become involved in, something that provides you with assistance. An example of a service is "a Hotel"
Social enterprise- A social Enterprise is a business set up to aid society rather than a profit. Example "A library"
A video clip on Product and Service:
And here is a video clip on Social Enterprise:
Service- A service is something you can become involved in, something that provides you with assistance. An example of a service is "a Hotel"
Social enterprise- A social Enterprise is a business set up to aid society rather than a profit. Example "A library"
A video clip on Product and Service:
And here is a video clip on Social Enterprise:
What are business objectives?
Targets allow businesses to keep track of their progress. There are two types of objectives, 'general objectives' and 'effective objectives'
General Objectives-
Are general statements e.g."To survive" or "To make a profit"
Effective objectives-
These are specific targets or are called 'SMART' targets.
Specific
Measurable
Achievable
Realistic
Timed
Examples: "To make £25,000 profit in the first 6 months"
Here is a video clip of General Business Objectives:
General Objectives-
Are general statements e.g."To survive" or "To make a profit"
Effective objectives-
These are specific targets or are called 'SMART' targets.
Specific
Measurable
Achievable
Realistic
Timed
Examples: "To make £25,000 profit in the first 6 months"
Here is a video clip of General Business Objectives:
What skills does an entrepreneur need to be successful?
Typical skills an entrepreneur needs:
Heres a video clip of entrepreneur skills:
- Confidence
- Organization
- Listener
- Leadership
- Experience
- Creative thinker
- Determination
- Communication
- Charisma
- Instinct
- Ruthless
- Risk Taker
- Inspiring
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