Notesale: Turn your study into money

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Business unit 1 Revision
Enterprise
Needs: essentials we need to survive, can be SATISFIED
Wants: Non-essentials we desire, cannot be satisfied – UNLIMITED
SME: small and medium enterprises
Primary sector: extract raw materials
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Industry declined
Tertiary sector: provide a service
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Provide ESSENTIAL services
Non excludability: can’t prevent anyone from using the services
Non-rivalry: services not reduced from others use; one’s consumption not effected by others using it
Public goods: provided by government; cannot by measured (non-rivalry)
Merit goods: provided by government or privately; aim to improve living standards
Private sector: Owned and run by shareholders and private individuals
Sole trader: owned and run by one person
Partnership: joint ownership between 2-20 people
Deed of Partnerships: legal document which sets the terms&conditions of the partnership
Private companies: business with a separate legal identity
Companies House: private companies register at Companies House, receive a CERTIFICATE OF
INCORPORATION
Memorandum of Association: details of company; name, location, selling
Articles of Association: internal running, rights of shareholders
Private Limited Company: owned by shareholders who are usually friends and family (investors&directors)
Public Limited Company: large well-known business that sells shares to the public on the STOCK EXCHANGE
(FTSE)
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Some employ socially challenged
Workers co-operative: business run and owned by its workers, profits shared
Charities: considered a trust fund, role to benefit the community
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Used to obtain finance, clearer guidance and opportunities
Business Link: UK government support, free
Local Enterprise Agency: non-profitable company to help small/new businesses grow
Stakeholders: any individual/group effects by a business
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Venture capital: when investors give money to risky ventures for a stake in the business
Others including own savings, grants

Market Structure
Market: buyers and sellers come together to ECHANGE goods and services for a PROFIT
Mass market: selling to large market, no DIFFERENTIATION between customers
Niche market: selling to a small market with specific needs
Market segmentation: splitting a large market into smaller segments according to characteristics
Global/international market: selling products overseas
Seasonal: selling when demand FLUCTUATES due to time of year
Trade market: B2B; businesses selling to other businesses

Monopoly: ONE business has control over market, illegal due to PRIVATISATION (common 30yrs ago by gov)
Any firms over 25% share of market can be investigated for monopoly power
Oligopoly: several business compete but only FEW DOMINATE market
Perfect competition: CUSTOMER controls the market; perfect knowledge
Monopolistic: many businesses in market but NONE dominate; SMALLER businesses
Demand: amount of product consumers are willing/able to purchase
Supply: amount of product the supplier is willing to offer the market at a price
Equilibrium price: demand and supply are equal (cross)
Elasticity of demand: measures the RESPONSIVENESS of DEMAND to change in PRICE
Elasticity of demand = % change in quantity demand
% change in price
Inferior goods: income rises, demand falls
Normal goods: income rises, demand rises
Luxury goods: income rises, demand rises a lot
CMA: replaced competition commission and roles of office for fair trading
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APR must be stated

Market Research
Market research: process of collection data of business’s customers, market place & competition
Primary research: gathers first hand data; by or on behalf of business
Secondary research: using previously collected data
Quantitative data: numerical data based on facts that can be tested
Qualitative data: opinion based data that is difficult to present
Sampling: not possible to ask everyone so a business takes a small quantity to gather data from
Random: every member of group has equal chance of being asked
Quota: splitting population up into specific groups by characteristics
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Systematic error in research

Business revenue and costs
Revenue/turnover: money gained from sales
Fixed costs: costs that remain the same regardless of output or sales
Variable costs: costs that change in direct proportion to sales or output
Breakeven output:
Contribution: difference between selling price and variable costs; amount each product contributes to fixed
costs
Profit:
Semi-variable costs: costs that are difficult to catagorise; can be seen as fixed or variable



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