I don't have any real knowledge of business studies except from what I have learnt through actually working, whereas some people in my group did business studies at college, so I have decided to help teach myself some of the basics by finding A level business studies books. I'm going to look at these over christmas, as well as all of the links we have been given and other recommended tools of learning from the enterprise lectures.
Notes
AS Business Studies - Malcolm Surridge and Andrew Gillespie
Setting up a business
1. The Idea
Your product/service needs to be better than what is out there:
- is it cheaper?
- is it easier to buy?
- is it better designed?
What makes you/your product special? What makes you stand out from the competition? USP - Unique selling proposition
2. Market Research
You need to be sure there is a market/demand out there for your product. Do your research to find out if your idea has a chance of making a profit.
- need a wide range of customers, and make sure questionnaire answers are not worded in a way that just gives you the answer you want, so you get a fair response.
- your company may make a loss at first, but need to be sure it will eventually make a profit
3. Pricing
Need to decide on pricing, as if you charge too much, no-one may buy it, but if you don't charge enough, you won't make enough profit. Need to know the demand as how many you sell effects as does how much you sell for.
4. Competition
Who are the competition? Compare your product with similar companies (SWOT analysis) to help you define why you are better!
Think about protecting your idea with a patent, so that others cannot copy it.
5. Financing
Where will you get the money from to start up a business?
Consider:
- using savings
- borrowing from friends/family
- loan from a bank
- bring in investors
6. Location of the business
This is crucial to its survival. If you need people to visit it needs to be in a good location. Also need to consider rent costs.
7. Build up a regular customer base
Offer good value for money, be good to your customers to keep them coming back, and recommending you to others, therefore building up customer loyalty. This can help you get a steady flow of income.
8. Produce a business plan
Think carefully about your idea to make your business successful. Banks will insist on seeing a business plan if you are wanting to borrow money.
[i] Objectives
- What are you hoping to achieve?
- How will you achieve these targets?
- How much money do you expect to make?
- How much time do you want to spend working?
[ii] Information on the market and competitors
[iii] Sales estimates
[iv] Estimates of costs, revenues and profits
[v] Research on customer needs and how your business meets these
[vi] Unique Selling Proposition
Types of Businesses
Sole traders work for themselves, and so are their own boss. It is easy to start up this type of business, but working alone can be very stressful and challenging.
A company is a business owned by shareholders. Each share represents a part of the company.
Private limited companies 'ltd' are owned by shareholders who can place a restriction on who the shares are sold to.
Public companies 'plc' are owned by shareholders, but shareholders can sell their shares to anyone. Another firm might buy up shares in a business to try and get control of it.
Business Objectives
What are your aims other than to gain a profit? Is it to be well known or to enjoy yourself etc... Produce your aims and show your values in the form of a mission statement.
Set SMART objectives - these are targets that need to be achieved to reach the overall aims. These can be both short and long term.
S - Specific - exactly what you are trying to do
M - Measurable - must be possible to measure whether the target has been achieved
A - Agreed - everyone has to be involved
R - Realistic - has to be achievable
T - Time Specific - how long do you have to complete the objective, make sure its not open ended
Objectives typically relate to:
- profit - growth (gaining more of the market) - social considerations (what the business will do for society or the local community) - employee welfare
Need to review and evaluate objectives.
The objective is the desired destination and the strategy is the means of getting there.
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