1. What makes a product great?

2. A gap in the market has been identified and exploited It is differentiated From competition Unique Selling Point Hard to imitate

3. Gaps – spot them

5. What is the purpose of business activity To meet the needs of a consumer by providing a good or service that they demand And to do so with a view to making a profit

6. The factors of production All businesses will use resources in order to produce goods Land, resources of nature, renewable and non renewable Labour, manual and skilled Provide examples Capital, finance and capital goods including technology Enterprise Entrepreneurs take risks They make decisions and coordinate resources DO WE NEED ALL FOUR??

7. Adding value Consider the following two meals, they both cost similar to produce

8. One sells for $8, the other for $35. The meal on the left costs $4, the other $9 Calculate the added value

9. How is this possible? Service Famous chef Appealling restaurant design/ surroundings Reputation of establishment

10. Goods with high added value

12. Why is the customer willing to pay so much? Minor cost to produce Powerful brand image reinforced by persuasive advertising

13. See formal definition page 6 and 1.2 page 6 Discuss the concept of value added as it may apply to a manufacturer of chocolate bars. Value added is the difference between the selling price of the chocolate bars and the materials or ingredients used in their production. The manufacturer will seek to increase this by raising the selling price to the customer possibly by improving the packaging so that the chocolates have a more “exclusive” feel to them.

14. Characteristics of successful entrepreneurs Innovation Carve a niche, find a gap Multi skilled Customer service and financial skills Risk taking Bouncing back

15. Major challenges faced by entrepreneurs Identifying successful opportunities Is there an actual need for the product Gap?? Sourcing finance Lack of trading record Poor credit risk in the view of lending institutions Lack of own savings Location The best or optimal location will have high rent and fixed costs. Can be difficult to break even.

16. Building a customer base Starting from scratch can be difficult, especially when competing with established businesses or franchises Established businesses have already established customer loyalty/ goodwill

17. Why do new businesses often fail Lack of working capital Working capital (cash) is crucial for the day to day running of a business Holding stock Paying wages/ expenses Giving trade credit, these customers will become debtors Paying suppliers

18. Poor management skills Planning and coordinating Decision making Leadership Marketing/ promotion An entrepreneur may be an excellent chef and skilled at preparing food but can he motivate and lead his subordinates?

19. Changes in the business environment In business nothing stays the same except one thing…… Only one thing is constant/ always there……. CHANGE Name three changes Competitors Legal changes Economic, interest rates Technology and e-commerce

20. Primary Secondary Tertiary Sectors See corny youtube

21. Impact of enterprise on economy

26. See article on wine exports

27. Economic growth As businesses sell goods and services to their customer bases this output will increase the Gross Domestic Product of the country. This economic growth will increase the standard of living and contribute taxation revenue for the government If the business exports this will help improve the balance of payments

28. Employment creation Workers are paid a wage and this money is spent on goods and services. (consumer spending) The level of unemployment is decreased

29. Survival and growth Small busineses can expand and make significant contributions to the economy – as above

30. Social cohesion is increased Unemployment can create social problems Workers with jobs can have career opportunities People feel valued

31. Social enterprise A business with mainly social objectives that reinvests any profit back into society They will often adopt a triple bottom line approach Economic Social Environmental See Wilding and Co Any aims or decisions will often have moral or ethical dimensions.

32. The problem of choice Resources are scarce. There are insufficient goods and services to satisfy all our needs and wants at once. This “shortage” leads us to making choices. We will choose what we will satisfy now and what we will forgo. Opportunity cost The opportunity cost of purchasing an item is the next best alternative that is given up. If a consumer is deciding between new shoes or a new watch, and decides to buy the shoes then the opportunity cost of these shoes is the watch.