Questions and Answers
What is the primary sector of business?
An entrepreneur is someone who works for a business.
False
What is an opportunity cost?
Something that is given up in order to do something else
The four main business functions are marketing, operations, human resources, and __________________.
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What type of sector would a hairdresser be in?
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Capital refers to the entrepreneur who takes a risk and creates the business.
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Match the following business sectors with their descriptions:
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What is Enterprise?
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What is the main reason an entrepreneur may start a business to fill a gap in the market?
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Services are tangible items that can be used and stored.
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What are the four factors of production that a business needs to produce their products or provide their service?
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Goods are _______________________ items that can be used and stored.
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Match the following terms with their definitions:
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What is an example of a business that provides a service?
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Labour includes the physical land where the business is located.
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What is an example of a renewable resource that a business might need?
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Study Notes
Reasons for Starting a Business
- Entrepreneurs start businesses to produce goods, provide services, distribute products, benefit society, fill a gap in the market, or fulfill a business opportunity
- Examples of goods-producing businesses: Coca-Cola and Cadbury
- Examples of service-providing businesses: Premier Inn and Talk Talk
Goods and Services
- Goods are tangible items that can be used and stored, such as computers, food, and clothes
- Services are intangible actions that cannot be stored, such as hairdressing, train journeys, and internet access
Wants and Needs
- Wants are things people would like to have but can survive without, such as event tickets, designer accessories, and luxury cars
- Needs are life-essential things required to survive, such as clothing, food, shelter, warmth, and water
Factors of Production
- Four factors of production needed for businesses to produce goods or provide services: land, labour, capital, and enterprise
- Land: physical location and natural resources (non-renewable and renewable)
- Labour: staff needed by the business with required skills and qualifications
- Capital: machinery and equipment needed for production
- Enterprise: entrepreneur who takes a risk and creates the business using the other three factors
Opportunity Cost
- Opportunity cost: something given up in order to do something else
- Examples: choosing between two office locations or allocating £5,000 to either a new advertising campaign or staff training
Business Sectors
- Businesses can be split into three sectors: primary, secondary, and tertiary
- Primary Sector: produces or extracts raw materials (fishing, farming, mining)
- Secondary Sector: makes or manufactures goods from raw materials (factories, food manufacturers, car manufacturers)
- Tertiary Sector: provides services (estate agents, hairdressers, restaurants)
Business Functions
- Four main business functions that work together for a successful business: marketing, operations, human resources, and finance
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Description
Discover the various reasons why entrepreneurs start a business, including producing goods, providing services, distributing products, and more. Learn about the motivations behind business ventures and how they contribute to society.
