we start with bread and butter topics first so goods and services something you need to be on top of goods of course tangible Services intangible needs and wants so needs could be shelter food water wants would be everything beyond that factors of production you're thinking land you're thinking labor you're thinking capital and you're thinking Enterprise or the entrepreneur to cool those other three factors of production opportunity cost so you make a decision what did you sacrifice business sectors primary secondary tertiary within secondary don't forget that's construction or manufacturing and within Services we're thinking that's tertiary an example of that could be a hairdresser characteristics of an entrepreneur hardworking Innovative organized and willingness to take a risk meanwhile that's different to objectives of an entrepreneur which could be you just wanted to Be Your Own Boss or flexible working hours or to pursue an interest earn more money identify a gap in the market or maybe you have dissatisfaction with your current job so that's objectives of an entrepreneur the next thing is dynamic change so Dynamic change you're thinking Telly if you've seen the video that's just really about constant change happening outside the business's control and it impacts the business so when we think about Telly we're thinking about technology we're thinking about the environment or ethical changes we're thinking about changes to laws legislation and the economy so we'll get back into that later on when we go through unit 2 the next topic to think about is business ownership forms so remember your business ownership forms Soul traders of course know your pros and cons Partnerships know your pros and cons there now remember Soul Traders and Partnerships both will have unlimited liability which could be an issue a disadvantage private limited companies and public limited companies you'd use limited liability the other way around so they would have limited liability so there is obviously a set level that they are limit limited to in terms of their losses with all of these business ownership structures don't forget about plums so you could think P stands for profit distribution so how were the profits distributed in the case of a public limited company they're likely to have lots of shareholders and that would mean dividends they need to pay out dividends remember an advantage of public limited companies is that access to enormous Finance then you want to think about l so do they have limited or unlimited liability just to recap that again you will have limited liability in private limited it's in the name public limited it's in the name and you'll have unlimited liability in Soul Traders and Partnerships then we think about management and control so if you are a public limited company you will have that divorce of ownership and control between the managers and the owners and then for S sources of Finance you might have access to additional sources of Finance if you move from for instance a soul Trader or a partnership to a private limited company because you can now sell shares you can sell shares to get Equity finance and if you move from a private limited company to a public limited company well then you have access to the stock exchange where you can get enormous Finance let's move on to the next one so aims and objectives business objectives is the first thing to think about and those objectives could be yes profit maximization profit Max but not always profit would be this objective of the business because it could be survival it could be domestic growth that's growth in your own country or it could be International growth growth in other countries or it could be market share or customer satisfaction or social and ethical objectives or if you are a public limited company you will have shareholders and they'll want the share price to go up and that's is called shareholder value now the business objectives could depend on things it could depend on the size of the business a so Trader in the early days likely to be likely to be survival meanwhile a public limited company is likely likely to be towards profit maximization or at least increasing shareholder value it could depend on how much competition the business is faced with it could depend on the type of business for instance it could be a not for-profit organization a social Enterprise now they wouldn't be profit maximizers because they' be pursuing a social and ethical objective also remember business objectives will evolve it could be in the early days it's survival and then you look to grow grow domestically then grow internationally and then after that you might want to eventually lead to profit maximization examples of the real world could be these big Tech thms Amazon for example many many years it went through the idea of growing um domestically growing internationally growing its market share and it will be in the future that it looks to profit maximize and of course keep it shareholders sweet so business objectives will evolve it may become um the dominant business that could be a reason why it evolves it may want to expand internationally as I said or it could be it may want to pursue shareholder value or it might have to change or adapt because of ethical and environmental considerations number four is stakeholders so know your types of stakeholders we're thinking owners employees customers local community suppliers anyone anyone anyone with an interest in a business next thing is know what the stakeholders objectives are so it could be if you are an employee you'd want to maximize your pay maybe you're the local community you'd want to think about minimizing environmental impacts maybe you're a shareholder you're thinking about higher dividends tiies next thing is awareness of conflicts between stakeholders so it could be a conflict is shareholders want to get more diddies but that could be at the expense of employees getting a pay rise or training number five business location so understand the factors that influence where a business is located so you need to be thinking about proximity to the market thinking about the availability of raw materials is it easy to get access in terms of those raw materials and for all of this in business location you're of course thinking where to locate the business you might want to locate the business in a certain area because you have access to workers labor you might want to locate in a certain a certain location because of um there's there's no competition there there's a gap in the market which would be wonderful or it could be because it's lower in terms of costs to locate your business in a certain place maybe you do not locate in an urban place but instead you locate in a rural place because it doesn't impact your demand and it keeps your cost down the next thing is business planning so business planning we're thinking about the types of cost fixed costs do not change with output variable costs vary with output in the name vary and then fixed cost FC variable cost VC if you add those together it comes to total cost TC now of course remember that profit equals Revenue minus costs but sometimes it's more helpful to think of it as profit equals Revenue minus total costs because toal costs equals fixed costs plus variable costs next thing to think about is why create business plans so in terms of creating business plans will you do that because it might help you in terms of raising Finance from a stakeholder such as a bank if you're trying to get a loan of course it could be setting objectives or it could be detailing um in the business plan how all the functional areas the Departments of the business like marketing like HR like operations like Finance should be organized based on that that business plan issues of business PL so issues of business plans you could be thinking expense and time it could be that you are looking to um set up a new business and you decide to do a business plan well that might slow your entry to the market by doing that you might miss out on opportunities because of doing that business plan so you'll want to think about the time in creation of that business plan and of course the cost or the expense of that business plan number seven expanding a business so you're thinking about methods of growth here we remember internal growth or organic growth and external growth or inorganic growth for internal or organic growth if you've seen the video iPhone so internal growth four types franchising now your pros and cons there Outsourcing new stores and e-commerce and then on the external growth side so essentially you look to grow your business by doing takeovers that's the tea and merges so make a friendly join with another public limited company so that's your things you need to know on methods of growth now remember if you are growing a benefit of growing is you get economies of scale we put EOS there for the moment two types of economies of scale you need to know are purchasing so that's you buy more from your suppliers you increase your negotiating power from your suppliers well that will allow you to bring down your average cost per unit in terms of what you buy it's essentially bulk buying and then technical economies a scale that you introduce technology into your business that will improve your productivity makes you more efficient brings down your average cost per unit so economies of scale lowers average cost per unit acpu average cost per unit that means that you could lower your prices and that will be particularly useful if you're in a competitive market you've got lots of Rivals I'll go for that one more time such a fantastically important concept economies of scale allows you to lower your average cost per unit so therefore it's cheaper to make one thing so when it's cheaper to make one one thing you might be able to lower your prices and if you lower your prices and you have lots of Rivals that's going to be fantastic for your demand for your market share and so forth now remember economies of scale if you grow too rapidly or too much it might lead to dis economies a scale and that's when your average cost per unit does not go down instead it goes up and that's bad and that might happen due to poor communication because you got too big or poor coordination in your business because you got too big that could lead to reduced staff motivation number eight is Telly so we're thinking here really Dynamic nature and we have switched to unit 2 if you see in the top left so within Telly which is obviously from the video that I've done previously we're thinking about Dynamic nature of business so t for technology technology we're thinking about digital communication digital communication now businesses obviously communicate via text messages via email via social media um employees will be trained in using social media accounts so that's all types of digital communication e-commerce the benefit there is wider access for the business to more more customers then e is environmental and or ethical and then we're thinking about the profits and ethics tradeoff that might exist now obviously if you try to make more profits that might be as a result of being less ethical then we could be thinking about the types of environmental consideration impact on traffic congestion recycling disposing of waste noise and air pollution and don't forget sustainability and the sustainability profit tradeoff much like the profits and ethics tradeoff next thing to think about is legislation so that's laws essentially three laws to be aware of employment law health and safety and consumer laws so employment laws we're thinking national minimum wage or living wage when you're 24 and over or the equality Act is another type of employment law that's equality act 2010 health and safety work act 1974 to be aware of that so that's a law that sets out the legal framework for ensuring the health safety and Welfare of people at work and then you have the consumer law so consumer law or trade descriptions essentially are laws that protect consumers from misleading or false information about goods or services and then the impacts of legislation on businesses so we're thinking about cost with about training needs Recruitment and the consequences of failure if you if you fail as a business to meet the legislation so you could be fined or shut down in the worst case then economic we thinking about so that spells Telly of course economic factors to think about in unit 2 are interest rates now interest rates affect the sources of finance that are overdrafts and Loans interest rates can go up or they can go down if they go down then that's good if you have an overdraft good if you have a loan because there's less interest repayments if they go up which they have been in the real world so I wonder if the question will go go that way if they go up that is bad for a business it's bad for a business primarily because you know have to spend more on that overdraft in terms of service in it more on those loans in terms of service in it now remember interest rate is just the price of rening money the next thing to think about is how interest rates could affect consumers because we just discussed how they affect businesses or producers how they could affect consumers now if a consumer has a loan has an overdraft has a mortgage interest rates going up means they have less disposable income if they have less disposable income they have less money essentially to spend on products and the first ones to get hit will be luxury goods luxury goods will be hit before necessity Goods when you have higher interest rates leading to lower disposable incomes next thing to think about is number nine globalization now remember the world has become more interconnected and then we need to think about how UK businesses compete GL globally or internationally and usually it's because UK businesses will create better designs or they create higher quality products but at a lower price now if you have globalization and the world becoming more interconnected therefore that means exchange rates become massively important because when a UK business is sells to America the exchange rate comes into play because the UK uses pounds the US uses dollars so then you'll be thinking about spiced so strong pound Imports cheap exports deer so you have a pound that's increasing or appreciating as it might say well that would be good if you're an importer because your pound buys more from abroad so it brings down your importing cost hence Imports cheap and then export deer well if the pound's getting stronger then your products seem relatively more expensive in other countries and that might be bad for your demand and with spice that's strong pound if it's weak pound you just might turn it the other way and it would spell whiper deck so it would be weak pound Imports dear exports cheap number 10 is competitive environments here we're thinking market and competition make sure you know the difference between these two concepts now the market is a place where buyers and sellers come together to exchange goods and services that's the market while the competition is essentially the Rivalry between businesses to attract customers and market share in other words a market is a physical or virtual space where buyers and sellers interact while competition is the struggle between businesses to gain an advantage over their Rivals next thing to be aware of is risk and obviously businesses will try to minimize their risk meanwhile uncertainty where all businesses face this so production methods the first production method is job production so job production advantages of that well bespoke high levels of customization better able to meet customer needs issues with job production it's more expensive because you have to employ skilled workers it could be more more time consuming and less efficient flow production so that's the efficient as it's a continuous flow in the name flow of production so efficient as a continuous flow of production might lead to technical economies of scale flow production leads to standardized products that means the same product over and over and over again issues with flow production will high investment costs you need to buy the equipment it tends to be inflexible it's hard to adjust the equipment and workers have a high likelihood of becoming demotivated that could be an issue it could lead to absenteeism it could lead to low staff retention that's high staff turnover when is each most appropriate well job production makes sense when it's custom made highly customized it's highend it's high value small batches are made individual batches are made and there's a high level of craftsmanship flow production makes sense when it's mass produced you're looking for those economies of scale you want the product to be standardized mightbe that's low end low cost and when there's large batches and they're continuous ly made and there is not a high level of craftmanship lean production well lean production we're thinking about reducing waste so that means less waste less waste more efficient leads to higher profitability now just in time is a type of lean production just in time is the elimination of waste by producing goods or services only when they are needed so stock management well just in time is a type of stock management just in time is a type of lean production it leads to improved efficiency see it saves on storage costs that's the cost of holding the buffer stock meanwhile the opposite of just in time is just in case just in case well the advantages of this is that you'll get purchasing economies a scale that will lower your average cost per unit per one thing and also if just in case well you're going to have spare stock and that spare stock will satisfy unexpected demand now choice of suppliers QPR oops oops oops quality price reliable or reliability remember reliability is useful for just in time QPR is just a way to remember it procurement and Logistics procurement is the process of acquiring goods and services typically for business purposes it deals with the suppliers Logistics Transportation essentially is the process of planning organizing and managing of the flow of goods and services from the point of origin that could be your supplier to the point of consumption that could be the retail outlet both of them they seek to be efficient and they seek to lower unit costs effective Supply Chain management well if you've got an effective a good supply chain it's being managed well that will reduce costs because you've got a streamlined process and that means better customer service higher profits quality well the consequences of quality issues is you could lose customers it might lead to lower productivity amongst staff increased costs and damaged reputation tqm remember tqm is about maintaining consistent quality tqm is a management philosophy that emphasizes the continuous Improv Improvement of quality in all all all aspects of the business that's all the functional areas maintaining quality benefits of maintaining quality well it might lead to more sales a better image and a higher price if you're lucky enough to be able to increase your price over time because you have maintained quality but maintaining quality comes with costs inspection costs quality control staff need training and remember for a growing business a business that's growing that could be internal growth such as franchising or Outsourcing quality is hard to maintain could be a con could be an evaluation Point next good customer service well what is good customer service well that's like to be product knowledge knowledge about the product customer engagement where you create a positive experience for the customer and post sales Services that's after post means after after sales services that could be user training so they understand how the product works helplines if you need to ring someone how does it work and servicing next thing benefits of good customer service that might include an increase in customer satisfaction Customer Loyalty increased spend profitability they're the good things about good customer service the problems of poor customer service where your customers will be dissatisfied it could lead to poor reputation via word of mouth and a reduction in Revenue how customer service has evolved well customer service has evolved because of advances in ICT that have allowed customer services through websites through e-commerce through social media to evolve next organizational structures so we'll be thinking about span of control that's the number of subordinates that a manager can effectively supervise chain of command that's the formal line of authority and communication in organization delayering that's the process of reducing the number of levels in an organization's hierarchy delegation that's the process of assigning tasks and responsibilities to others centralization leads to consistency need for control and efficiency think lots of sees for centralization that's decisions are made at the top of an organization Recruitment and selection internal recruitment leads to increased morale because there's more opportunities that's recruiting from inside your organization productivity might improve reduce costs on Advertising because you're recruiting from inside your business more Knowledge and Skills because you're using the existing Knowledge and Skills inside your business perhaps more likelihood to be successful they're already a good cultural fit external recruitment well now you're looking to recruit outside your business wider pool of candidates it might add diversity to the organization New Perspectives more Innovation more creativity recruitment selection duh job analysis is the first of the stages in Recruitment and selection so job analysis is a process of gathering and analyzing information about a job in order to make informed decisions about Recruitment and selection so you are analyzing what you require from the job that's job analysis that's followed by person specification that's simply just a list of the skills of the knowledge and have the experience required for a particular job selection methods selection methods could be interviews for example third bit TW of Recruitment and selection types of contracts so once you have selected who you want for the job you might offer them a contract you might offer them a part-time contract a full-time contract a zero hours contract and they would be more flexible or a job share remember a job share is an employment Arrangement where two or more people share the responsibilities of a full-time job it's good for employ EES because it increased flexibility work life balance reduce stress levels increased job satisfaction increased opportunities for advancement perhaps even reduce child care costs for employeers access to wider pool of talent reduced Recruitment and training costs increased productivity improved employee morale reduce absenteeism next Recruitment and selection number four cap so we're thinking about full-time contracts part-time contracts and the benefits of each let's go through the benefits of full-time contracts so reduce risks because full-time employees are typically less likely to leave their jobs than part-time employees this could reduce the risk of turnover which can save employers money on recruitment money on training costs that could be induction training costs increased productivity is another benefit of full-time workers so full-time employees may be more productive than part-time employees because they have more time to focus on their work greater commitment so full-time employees may be more committed to their jobs than part-time employees maybe this can lead to a more positive work environment and improve customer service part-time part-time reduce costs part-time employees typically receive lower salaries and benefits than full-time employees this can save employers money increased flexibility so part-time employees can be a valuable asset for employers who need to be able to adjust their Workforce quickly so it gives you flexibility perhaps you might have a sudden increase in demand for your product for your service and so forth also part-time work might lead to an access to a wider pool of talent maybe there's people that only want to work part-time if you're offering part-time contracts you could seize those skills next motivating employees the importance of motivating staff so we're thinking higher productivity improved quality higher Staff retention better customer service next financial methods of motivation salary wages profit sharing commission meanwhile non-financial methods of motivation management styles you could be thinking about or for AR or autocratic versus Democratic training give responsibility and fringe benefits remember fringe benefits is a nonfinancial method of motivation 14 training why offer training well it leads to higher productivity you might be able as a business to quickly adjust to technological change and remember we're in a dynamic environment and there's lots of technological change or Tech change more motivated staff higher Staff retention better quality on your goods and your customer service so that's why you offer training next thing to think about is types of training induction training training that new employees receive to introduce them to the company its culture and their new role on the job training is training that employees receive while they are performing their job duties under the guidance of probably a more experienced employee well you'd hope so anyway off the job training is training that employees receive outside of the workplace in a formal place like a classroom or a training center next on training is the benefits of each of these so the benefits of induction training well it helps new employees feel more comfortable and confident in their new role that's the day one training on the job training well that allows employees to learn the skills and the knowledge they need to do do their job effectively off the job training well that provides employees with the opportunity to learn new skills and knowledge in a safe controlled environment hope that helps see you the next session