GCSE Business Studies/Business Ideas

Business Aims
A business gets started when somebody decides that they can earn a profit by making goods or providing a service and selling it to people who are willing to pay for it. All businesses have the same main objective: to make a profit. A business must make a profit in order to survive. If not, it will go bankrupt and have to close down.

Businesses may have other secondary objectives they also wish to achieve, such as:
 * To be the largest in their market.
 * Provide the highest quality product possible.
 * Expand the business organizations to a good position.
 * Maintain a high market share in the market.
 * Maintain a high customer satisfaction level.
 * Limit environmental damage they cause.

The Economy
An economy has two sectors:

The Public Sector
 * The public sector includes everything that is owned by government.
 * It includes things like the army, the police, and most schools and hospitals.
 * Public sector businesses do not exist to make a profit. They exist for the benefit of everyone.

The Private Sector
 * The private sector includes everything that is owned by private individuals.
 * Most businesses are in the private sector.
 * Private sector businesses exist to make a profit. They are run for the benefit of the people who own them.

Needs and Wants

 * 1) Businesses make a profit by providing things that people need and want.
 * 2) There is a difference between a need and a want. A need is something essential to survive. A want is something which we would like but do not need to survive.
 * 3) Humans have five basic needs: food, water, shelter, warmth, and clothing.
 * 4) Needs are only limited. Once we have these, we can think about other things we want. Wants are unlimited - we all have different ones, and we tend to want bigger and better things.
 * 5) ex of needs: luxury house/ sanitary items.
 * 6) Products are launched to fulfill the needs and wants of the consumers in the business's target market.

Opportunity Cost

 * The world's resources are divided into four groups:
 * Land - natural resources.
 * Labour - people.
 * Capital - equipment.
 * Enterprise - business owners and entrepreneurs.
 * There aren't enough resources to meet all of our needs and wants. (This is termed scarcity.)
 * This leads to an opportunity cost.
 * Consumers and businesses have to make choices when they buy things, because they do not have enough money to buy everything they want.
 * The opportunity cost is the cost of rejecting the alternatives when making a selection. For example, if you only have enough money to buy a video game or a CD, the opportunity cost of choosing the game is the CD. By buying the game, you give up the opportunity to buy the CD.
 * Every business decision has an opportunity cost. There is a risk that the decision will be poor and the business will make a loss. Any profit is the owner's reward for taking that risk.

Goods and Services

 * In most cases, businesses will either produce goods or provide a service.
 * Goods and services can both be bought; however, goods are tangible (physical objects), and services are intangible (non-physical).
 * Goods and services can be put into two groups:
 * Consumer goods and services are intended for the use of the ordinary public, e.g. televisions, hairdressers.
 * Producer goods and services are intended for the use of other businesses, e.g. machinery, advertising companies.
 * In addition, there are two types of goods:
 * Durable goods can be used over and over again, e.g. fridges, trousers.
 * Single use goods can only be used once, e.g. a chocolate bar, a bottle of milk.