1.1 enterprise and entrepreneurship Flashcards
Aim
States the overall purpose for the business, the long term goal
Mission statement
General description of the overall aims of the business; can be just one sentence!
Objectives
Specific, measurable targets to help meet the aims of the business
Financial Business Aims & objectives
- Making profit
- Maximising sales
- Establishing market share
- Financial security
- Survival
Non-financial Business Aims & objectives
Social objectives
E.g. providing jobs & skills for a local community
Personal satisfaction
The feeling of having created something
New skills learned
Independence & Control
No-one will ‘order’ you to run your business in a certain way (if you own it)
How to reduce risk of business failure
-Plan – for example prepare a realistic business plan
-Research – market research should be valid, up to date and specific to the business’s needs
-Be cautious – the business should avoid growing too fast
-Finance with care – an entrepreneur’s own savings, shares and retained profits are safer than loans, as these sources of finance do not need to be paid back
-Keep costs down – premises and staff are expensive
added value
Added value is the increased worth that a business creates for its product
Purpose of business activity
To produce & add value to goods and services
To meet customer needs successfully
Ways a business can add value -convenience
It is usually quicker to buy something than to make it yourself at home. Businesses can charge more money because of this.
Ways a business can add value - features
The nicer packaging means that the business can add to the price charged.
Ways a business can add value - Quality
Higher quality ingredients used = higher cost = higher price charged.
Ways a business can add value - brand
Businesses create well known brands. Customers will see the label and be willing to pay extra money for the better quality and because they trust the brand they buy from regularly.
ways a buisness can add value - summary
Build a strong brand
Offer a unique selling point
Deliver excellent customer service
Add product features and benefits that customers want e.g. convenience
Provide a high-quality product
Produce a well designed product
Business benefits of adding value
Charge a higher price
Create a point of difference with competitors
Protection against competitors offering lower prices
what are goods?
Goods are actual objects.
They can be touched, felt and held.
They are produced and consumed.
