1:1 Role of Business Enterprise and Entrepreneurship Purpose of a 1:2 Business Planning

Role of a business
business plan: plan:
Enterprise is: Risk-taking Determination
seeing an ▪ To reduce the risk A business plan: ▪ Identify markets
opportunity to of starting a business details how a business ▪ Helping with
Entrepreneurial
provide a product or characteristics ▪ To help a business aims to achieve its finance
service that people succeed objectives ▪ Identifying
are willing to buy Creativity Confidence resources needed
▪ Achieving aims and
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The objectives
Risk Reward Entrepreneur People
idea
A person who Competition running
▪ Financial ▪ Financial it
Possibility of losing Some successful takes the risk of Business plan
money entrepreneurs can make a starting and A simple plan which
lot of money running a business Target Market sets out the details of
▪ Health market research
▪ Independence the business
The strain of being in
Some people like to be their Enterprising
charge can affect health
own boss characteristics Contents Finance
▪ Strained ▪ Self-satisfaction Features of an Aims and of a
objectives business Finance The money needed
relationships Some people like to see and entrepreneur plan
Starting a business is idea work to start the business
time consuming
Unit 1: Business Activity

1:3 Business Ownership

Sole trader Partnership Private Limited Company (LTD) Public Limited Company (PLC)
Advantages Disadvantages Advantages Disadvantages Advantages Disadvantages Advantages Disadvantages
▪ Easy to set up ▪ Unlimited ▪ More capital ▪ Shared profit ▪ Limited ▪ Financial ▪ Can raise ▪ Possibility of a
▪Full control liability available ▪ Unlimited liability information large amounts takeover
▪ Keep all the ▪ Business ▪ Easy to set up liability ▪ Continuity available to the of capital ▪ Complex and
profits stops if ill or on ▪ More skills ▪ Shortage of ▪ Can raise public ▪ Easier to expensive to set
▪ Financial holiday available capital capital more ▪ Complex and borrow up
information is ▪Shortage of ▪ Shared ▪ Slower easily expensive to set money ▪ Hard to manage
private capital workload decision making ▪ Control over up ▪ Limited as so large
▪ Skills shortage ▪ Financial ▪ No continuity share sale ▪Dividends to be liability for ▪ Financial
▪ No continuity information is paid shareholders information
private available to the
public

Unlimited liability Responsibility for the debts of the business rests with the owners Capital Money raised to start or develop a business
Deed of partnership A document setting out the operations of  the partnership  Sleeping partner Someone who only invests in a partnership
Limited liability Responsibility for the debts of the business   is limited to the amount invested Shareholders Owners of a limited company
Dividend Money paid to shareholders from business profits
 1:4 Business Aims and Objectives Stakeholders are: 1:5 Stakeholders in Business
Business objectives: groups of people
are what the Stakeholde Internal or
or individuals r external Effects
business wants to who have an
achieve Growth interest in a See profit as their main aim so will
Market business
Owners Internal want to run the business cost
Profit effectively
share

Survival Employees want to be treated well and

Providing Internal Employees Internal receive a fair wage. Without this they
The business can pay Survival a service could go on strike
stakeholders
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its costs but has

Aims and People with an Customers want to receive a good
nothing left objectives interest in and who Customers External service and pay a fair price. Without
Profit this they could go to competitors
The difference work in the
between revenue and business Suppliers want to be paid on time.
Suppliers External Delayed payments could mean the
costs As businesses evolve their objectives may change supplier refuses orders
Market share External
The share of the total Initially: the aim may be to simply survive stakeholders The government wants businesses to
People with an Governmen succeed however an increase in
market for a product Later: the aim may be to increase profit or market share t
External
income tax means less money for
Growth interest in but who customers
The business becomes The objectives will also depend on the type of business are outside of the
business The local community will want jobs in
larger ownership i.e. sole trader or limited company Local
External their area however they could protest
community
against a new business development
Unit 1: Business Activity

Possible questions
Organic growth 1:6 Business Growth Assessment Information
Internal growth using There are two methods of business growth: 1. State two aims of a new start up
own resources i.e. business.
opening more shops Organic growth External growth Your Paper 1 will be in the morning on
Merger Friday 24th May 2. Define the term ‘entrepreneur’.
▪ Increasing Merger Takeover
Two or more
output Number of marks available: 80
businesses agreeing to Selling more Time allowed: 90 minutes 3. Explain how a business’ objectives
join together products Horizontal V may have changed since first
Takeover Two businesses in e
▪ Gaining new Answer ALL of the questions starting out.
One business takes customers the same r
control of another Reduce the price, production sector t 4. Analyse how a business decision
Horizontal growth The first 15 questions will be multiple may impact on two stakeholders.
open more shops
Two businesses in the i choice - you must only select ONE
▪ Developing answer, selecting two will score 0 marks.
same production new products
sector joining together Two businesses in 5. Analyse two benefits of being a
To target a wider c
Vertical growth different production The other questions will include a range public limited company.
range of a
Two businesses in sectors of 2, 3, 4, 6, 7, & 9 mark questions
customers l
6. Evaluate the effectiveness of a
different production ▪ Increasing Diversification business plan.
sectors joining market share Two businesses coming together
together Selling more than with no connection State Explain Analyse Recommend Evaluate
competitors
Purpose of a business plan: 1:2 Business Planning Role of a business plan:

A business plan:

Business plan

Finance

Contents of a
business plan
Contents of a
business plan

Contents of a
business plan
Organic growth Organic growth​ External growth​

•  Increasing output​ ​ ​
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Merger  ​ Horizontal 
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•  Gaining new customers ​
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Takeover 
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•  Developing new products​

Vertical
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Horizontal growth
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•
​
 Increasing market share​
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Vertical growth
Diversification