What is a business and what does it do? The term ‘business’ can cover anything from a sole trader in a local market to a multinational corporation selling products to millions of people all over the world.
This unit introduces you to the language and terminology used in business. It explores what businesses do, trends that affect them, how they operate and the factors that influence their success.
You will explore different types of business ownership and how these relate to the size and scale of a business, as well as how the type of ownership impacts on the responsibilities of the owners of a business. Combined with looking at types of business model, you can begin to understand how diverse the world of business is.
You will use your understanding of business language to investigate what businesses do by examining the aims and objectives they set, the importance of knowing their market and understanding the influence of their stakeholders.
You will plan an idea for a realistic business start-up in your local area, based on your research, select a format and then present the business model and plan.
You will need to produce a leaflet summarising the local business environment and assessing the factors that could affect the success of a start-up business. Remember that you need to keep a list of your sources of information.
The investors want to know how the business environment and current trends are likely to affect a start-up businesses chances of success. So you need to produce a leaflet explaining this to them.
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Task 1 (3 hours)
You will need to research and collect information on the local and national factors which affect the business environment.
The leaflet should include information on the likely effect of the following factors on a start up business (you can use these as headings to help you), research what they mean and how these affect start-up business
- Local factors
- Location of a start up business
- Why is location important?
- Are you on the internet?
- Are you near your customers?
- Are you mobile and able to go to your customers?
- Resources available in the local area for a start up business
- What physical resources do you need?
- What financial resources does a business start-up need?
- What human resources (people) do you need? What skills, qualifications do people need to work for you?
- Competitors in the local area affecting a start up business
- Why might competitors be important for a start-up business?
- How big are they?
- What is their product range?
- Customers in the local area (target market)
- Who are your customers? Age? Gender?
- Where are they?
- Location of a start up business
- Cost of borrowing/loans (Interest rate) on starting up
- Interest rates - What is the current interest rate? Is it low or high?
- What does this mean for a start up business borrowing money?
- What does this mean for customers who want to borrow money and spend money? Is the current interest rate good for them?
- What does this mean for businesses? Is it good or bad? Explain.
- Taxation changes and its impact on the cost of starting up
- Search Google to help you define taxation
- Use the following link to outline 'How taxation affects start up businesses'
- What taxes will you have to pay?
- Does paying any of these taxes depend on the amount you make? Explain.
- Inflation and the effect it might have once starting up
- Provide a definition
- Look at this link to The Inflation Game - explore the impact by changing the level inflation
- What happens if your business buys buy raw materials/ supplies? What happens to prices?
- What does it mean for the prices you charge customers for your product or service?
- Employment and Unemployment rates on the cost of workers when starting up
- Provide a definition
- Is high employment good or bad for your business?
- Is high unemployment good or bad for your business?
- Exchange rates and how they might affect a start up business
- Provide a definition
- What is the current exchange rate for the £ against the $US and the Euro?
- Is a strong exchange rate (£1 = $2) good or bad for business?
- Is a weak exchange rate (£1 = $1) good or bad for business?
What might it look like?
Task 2 (3 hours)
You will need to include a section in the leaflet which explains how current changes in the business environment impact on a start-up business. Remember trends are changes over a period of time.
You can find some examples of trends on each section here.
Trends to be included are the following; have a page on each one. You MUST refer to a start-up business.
- Social Media - Definition
- Population changes, increasing life expectancy
- Households and families
- Healthy eating
- Increasing travel to work
- Labour market - increasingly flexible workforce
- Increase in use of mobile technology - apps
- Web developments
- Renewable energy
- McDonalds - look at this information from their official website
- What items do they recycle?
- How much have they recycled?
- What are the benefits for a business of doing this?
- What are the drawbacks for a business of doing this?
- How will recycling impact on a business idea?
- Fair trade - Marks & Spencer's
- What is Fair Trade? Please explain
- Carbon foorprint
- Sources of timber
- Child labour
- Inadequate pay
- Animal welfare
- Values and ethics of an organisation
What might this task look like?
Task 3 (2 hours)
You need to demonstrate how trends have affected two start-up businesses. Select two new business in your local area that you can compare in terms of size and sector.
Size of business can be classified into the following:
- Micro - less than 9 people
- SME's ( Small and Medium sized Enterprises )
- Small - up to 49 people
- Medium - 50 - 249 people
- Large businesses - more than 250 staff
The sector of the business refers to
- Primary (extracts raw materials e.g. oil, farming, fishing)
- Secondary (manufactures goods e.g. clothing, cars)
- Tertiary (provides a service e.g. hairdresser, plumber)
Select TWO trends from Task 2 (the leaflet) and compare how they will have impacted on the existing start-up businesses. To do this you will need to do the following:
- Identify the similarities between the impact of the trends
- e.g. The increase in social media might affect business x because....... and it might have a similar effect on business y because........ Another similarity of this trend between business x and y might be.........
- Identify the differences between the impact of the trends
- e.g. The increase in healthy eating might mean that business x will have to......... However business y provides a service so the effect on this will be different because.......
This can be presented in a table format. An example is shown below but you MUST design and create your own
Here are some clues to what you could include when explaining how the trends might affect the businesses chosen;
- Product or services sold
- How will the business have to change/ adapt in response to the trend
- How the trend might benefit the business
- How the trend might be a problem for the business
Example of how a business has changed due to trends is Starbucks below
Here is an example of what your work could look like
Task 4 (3 hours)
Investors want to know whether a business idea is likely to succeed. Summarise Task 3 with an assessment of the following areas:
How will these trends in the business environment affect a start-up business?
You will need to back this up with evidence from your research and show that you have used trustworthy and relevant sources of information for your research. Use the 'Assessment' document below to help you to design and create YOUR OWN document.
You will produce information for your business idea, including the model and the plan for launching the business to convince your audience to invest in your business.
You will research which businesses in the local area are currently successful, and why. You will then plan and decide on a realistic idea for a proposed business start-up, as well as deciding on the format for the ownership of the business. You need to include findings from your research, the type of ownership proposed, whether you have chosen to provide services or goods, your aims, objectives and sources of finance for the business, who your stakeholders are and a justification of why you think your business will be successful.
To support your presentation to the investors, you need to produce information for your business that will show that you:
- understand what makes a successful business
- have a realistic plan for a business that is likely to be successful.
Task 1a (1 hour)
For this you can use the templates ‘business summary’ and ‘features’ from the website
Carry out research into what makes a business successful. Research at least four businesses, here are four you can choose from. You can choose your own BUT it must be local.
Task 1b (2 hours)
Task 2 (2 hours)
Task 3 (2 hours)
The 5 business types you need to research are;
Private Limited Company
Public Limited Company
State which format you would choose for your business and why. Clue: It is likely to be one of the first 2 on the list!
Research the different types and you could produce a table from your research (see example below, but you should create your own!).
WARNING - you are not allowed to cut and paste.
Task 4 (3 hours)
This could be in the style of a Dragons Den 'pitch', using PowerPoint or similar to support your presentation. It must include the following information (a slide for each one);
- You business idea
- The Unique selling point (USP)
- The type of business (Sole trader, Ltd, Partnership, Franchise) and why you have chosen this type.
- Evidence of market research you have done and the results of your research
- Explain how the business idea has the potential to respond to local market needs
- Justify how the business idea has potential for success in relation to existing local businesses.
Very Important: This can be done in your groups but you MUST demonstrate YOUR contribution and knowledge in the presentation to pass.
When this is complete you need to book a presentation slot with the teacher.
Task 5 (2-5 hours)
Think of a list of business ideas suitable for the local area. The ideas should be realistic and meet relevant criteria to include information on:
- the product/service
- the features and benefits of the product/service
- the demand
- market research that needs to be carried out
- the target customers
- the competition
- how you will market it
- resources that will be needed – finance, equipment, skills and expertise
- any legal aspects that need to be considered
When you have selected your start-up idea you will need to produce a business plan that includes all the information above. The plan should state what needs to be done, when by, how it will be done, and by whom (i.e. by you, or by an employee, etc.). Use ONE of the Business Plans below to help you.
Business Plan 1. This could ONLY get you a Merit without Tasks 6 and 7!
Business Plan 2. This is ONLY sufficient for a Pass unless you complete Tasks 6 and 7!
Business Plan 3. This is ONLY sufficient for a Pass unless you complete Tasks 6 and 7!
Business Plan 4. You will need to use this to get a Distinction!
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13.8 Headings. All headings contained in this Agreement are inserted for identification and convenience and will not be deemed part of this Agreement for purposes of interpretation.
13.9 Severability. If any provision of this Agreement is held invalid or unenforceable for any reason but would be valid and enforceable if appropriately modified, then such provision will apply with the modification necessary to make it valid and enforceable. If such provision cannot be so modified, the parties agree that such invalidity will not affect the validity of the remaining provisions of the Agreement.
13.10 Waiver. The delay or failure of either party to exercise any rights under this Agreement will not constitute or be deemed a waiver or forfeiture of such rights. No waiver will be valid unless in writing and signed by an authorized representative of the party against whom such waiver is sought to be enforced.
13.11 Complete Agreement. Each Order Form (a) is a separate agreement and is deemed to incorporate this Agreement, unless otherwise expressly provided in that Order Form; (b) constitutes the exclusive terms and conditions with respect to the subject matter of that Order Form, notwithstanding any different or additional terms that may be contained in the form of purchase order or other document used by Client to place orders or otherwise effect transactions under this Agreement; and (c) represents the final, complete and exclusive statement of the agreement between the parties with respect thereto, notwithstanding any prior written agreements or prior and contemporaneous oral agreements with respect to the subject matter of the Order Form. In the event of any conflict between this Agreement, any Order Form and any end user license agreement for Software, this Agreement will take precedence unless otherwise expressly provided in the Order Form. Notwithstanding any provision to the contrary in this Agreement, any applicable end user license agreement will be governed by the laws of the State of New York and of the United States, without regard to any conflict of laws provisions. Any claim relating to the provision of the Services by Red Hat, its Affiliates or their respective personnel will be made against Red Hat alone.
13.12 Amendment. Neither this Agreement nor any Order Form may be amended or modified except in a writing signed by the parties, which writing makes specific reference to this Agreement or the applicable Order Form.
13.13 Counterparts and Facsimile Signature. In the event this Agreement is executed with signatures, this Agreement may be executed in counterparts, each of which will be deemed an original and all of which will constitute one and the same document. The parties may exchange signature pages by facsimile and such signatures will be effective to bind the parties to all the terms contained in this Agreement.
13.14 United States Government End Users. The Software and its documentation are “Commercial items,” “Commercial computer software” and “Computer software documentation” as defined by the Federal Acquisition Regulations (“FAR”) and Defense Federal Acquisition Regulations Supplement (“DFARS”). Pursuant to FAR 12.211, FAR 12.212, DFARS, 227.7202-1 through 227.7202-4, and their successors, the U.S. Government acquires the Software and its documentation subject to the terms of this Agreement.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT.