Edexcel GCSE Business Unit 1 Exam Preparation: Small Business and Enterprise Revision Notes

Edexcel GCSE Business Unit 1 Exam Preparation: Small Business and Enterprise Revision Notes
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Learn about enterprise skills, goods and services with examples. Understand terms like risk taking, initiative, tangible and intangible products.

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1. Edexcel GCSE Business Unit 1 Exam Preparation Introduction to Small Business Revision Notes Topic 1.2 Showing enterprise

2. Edexcel GCSE Business Unit 1 Exam Preparation What is enterprise? Enterprise is a willingness by an individual or business to take risks, show initiative and undertake new ventures. Enterprise skills Risk taking Willingness to undertake new ventures Showing initiative

3. Edexcel GCSE Business Unit 1 Exam Preparation Goods and services Goods - examples Services - examples Pair of scissors Train journey Chocolate bar Haircut Pen Hand car wash Box of cereal Restaurant meal Terms you need to know: Goods – are physical, tangible products. Services – are intangible products.

4. Edexcel GCSE Business Unit 1 Exam Preparation Thinking creatively Thinking creatively involves coming up with an idea that is unique and did not exist before. This can give a business a competitive advantage . Competitive advantage – anything that enables a business to perform better than its rivals in the market and which is both distinctive (stands out from rivals) and defensible (not easily copied).

5. Edexcel GCSE Business Unit 1 Exam Preparation Lateral thinking or deliberate creativity? There are different ways of coming up with new business ideas. You need to know particular methods: Definition Example Deliberate creativity The intentional creation of new ideas through recognised techniques. This involves using structured and logical techniques. • Lists • Producing ‘step-by-step’ details Lateral thinking Thinking differently to try and find new and unexpected ideas. • Thinking ‘outside the box’ • Six Thinking Hats • Gut instinct • Emotions

6. Edexcel GCSE Business Unit 1 Exam Preparation Questions to be asked It is essential for entrepreneurs to ask themselves questions. You need to know the importance of the following types of questions: Question Example Possible answers Why? Why should I start my own business? To use my full range of skills that I am not doing in my current job. Why not? Why not offer 100% organic food on the menu? Because it will be very expensive for the business. What if? What if my supplier increases the price of my main ingredients by 20%? I would need to increase price, which might prove difficult. How? How can I increase the amount of profit for every unit I sell? By reducing the cost of packaging used by 5% per unit. Where? Where can I get help and advice? My bank has a free ‘Business Adviser’ service.

7. Edexcel GCSE Business Unit 1 Exam Preparation Where do business ideas come from? Individuals Research & Development departments By accident! Customers – feedback Deliberate creativity

8. Edexcel GCSE Business Unit 1 Exam Preparation Invention and innovation Make sure you understand the difference between invention and innovation. They are not the same thing! Invention – the discovery of new processes and potential new products, typically after a period of research. For example, James Dyson invented the bagless vacuum cleaner 8 years before the first cleaner was sold to the public. Innovation – the process of transforming inventions into products that can be sold to customers. How will the idea become a product that customers might use? How will it be manufactured?

9. Edexcel GCSE Business Unit 1 Exam Preparation Protecting ideas Entrepreneurs can protect their ideas by use of patents, copyright and trademarks. Make sure you know the difference. Method of protecting business ideas Patent – the right of ownership of an invention or process Copyright – legal ownership of material such as books, music and films Trademark – the sign, symbol or feature of a business that cannot be copied by other businesses

10. Edexcel GCSE Business Unit 1 Exam Preparation What is calculated risk? Calculated risk – the probability of a negative event occurring. • In an exam question you will be asked to identify the correct example of a calculated risk. • Don’t be fooled into selecting a response which you think ‘looks’ right. For instance, an option with a ‘%’ might not be right. • Look for the option which states how a likely an option is to occur. In this example, B is correct. Do you agree? A. There is a risk that costs will rise by 25% next year. B. There is a 50:50 chance that demand could fall next year.

11. Edexcel GCSE Business Unit 1 Exam Preparation Other enterprise skills Thinking ahead Making connections Determination Seeing opportunities Having drive

12. Edexcel GCSE Business Unit 1 Exam Preparation Making connections A useful technique for an entrepreneur when planning, thinking ahead and making connections is to use a mindmap . This is a diagram used to record words and ideas connected to a central idea. Max has produced the mindmap below to help identify his strengths: My strengths Planning Seeing opportunities Determination Drive Thinking ahead