BUSINESS STUDIES
REVISION
POWERPOINT
Created By;
Joe McNeillie
HERE ARE SOME REASONS FOR STARTING
A BUSINESS:
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Lost previous job
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Redundancy money
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Want to be your own boss
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Skills to be put to better use
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Experience to be put to better use
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Good idea
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Think you can make a better earning
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Desire to make a profit
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Lost previous job
REASONS WHY A BUSINESS MAY FAIL;
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Expected sales low
Lower income earned
Miscalculated costs
Failed to keep costs under control
Insufficient cash
Lack of skills and experience
Charging wrong price
Product not meeting customer needs
Lack of staff members
Too risky
Lack of money for growth
Badly run
More competition
Products / services better or
cheaper elsewhere
Old technology
The business does not move
on and reinvent itself
ENTERPRISE AND ENTREPRENEURS
 Enterprise is; The formation of a new business or development of a
new product or service to be introduced to the market.
 Entrepreneurs are; A person having generated a new business idea(s)
develops it by setting up a business. Often viewed as someone who is
willing to take risk(s) in setting up a new business.
PETER JONES RULES / QUALITIES OF AN
ENTREPRENEUR:
Vision, motivation, action, timing, results orientated,
confidence, influence, care, committed, intuition,
perseverance/persistence.
KYLE MACDONALD
 Kyle Macdonald set out on a quest to trade 1 red paperclip for a house;
he set up a website to get publicity and made 16 trades over one year
to get a house. He swapped a paperclip for a pen, for a doorknob, for a
camping stove. A town in America eventually bought a house and traded
it with Kyle to get publicity. The other things that Kyle swapped included
a second hand van, a recording contact, rent for one year and a paid
part in a film which is what Kyle swapped for a house.
CHARACTERISTICS OF AN
ENTREPRENEUR;
 Opportunity spotter
 Risk-taker
 Decision maker
 Creative thinker
 Self-motivator
 Strong communicator
WHY DO BUSINESSES EXIST?
 (To produce goods
- To make profit business
To distribute products
To provide a service)
 (To help others
business
To meet the needs of society)
- Not for profit / social enterprise
SOURCES OF BUSINESS IDEAS
 Personal Experience
 Business experience
 Market research
 Eureka moment
 Brain Storming
EXAM ALERT
 Question;
Explain two ways an entrepreneur can generate Business ideas? (4
marks)
 Answer;
An entrepreneur can generate business ideas from business experience as
you could have worked in a field of business and seen a flaw, gap in the
market or niche. Also you could generate ideas from Eureka moments as
you could suddenly find a new idea / solution to a problem.
MARKET SEGMENTATION
 Geographic location is linked to income and areas of prosperity, e.g. you
probably wouldn't put a Bentley garage in Kirkham but you might do in
London.
 Physiographic focuses on the impact of factors such as your personality,
lifestyle, values, social class and attitudes.
 Behavioural when you buy, your usage rate and brand loyalty – do you
always stick with one brand?
 What makes people go back to the same hairdressers or car dealerships?
 They go back as they are influenced by brand/company loyalty. Also
they may offer a good service at the right price that is reliable and is
easy for the customer to use the service.
COMPETITION GOOD AND BAD POINTS:
 Gives the company something to compare products against
 Learn from mistakes made by your competition
 Motivation to be better and beat your competition
 Encourages innovation
 Improved quality of products
 Lower prices of products
USP – UNIQUE SELLING POINT
 USP – Unique selling point adds value to a product and sets it apart
from its
Why do businesses use market
research?
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To sell goods and services
To advertise
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To identify customer needs