Read the summary and the most important questions on Chapter 1

• 1 Chapter 1

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• What is a service? 

  Non-physical items

• Give reasons as to why someone might start a business

  To pursue a hobby, to escape an uninteresting job, to use new technology, to work from home, to be their own boss, to provide something beneficial for others, to make the most of a business opportunity, to make money

• What is a social enterprise? 

  A business that is non-profit, all money made is re-invested in the business or used to help the community

• What is a gap in the market?

  A business opportunity that is either a completely new idea or adding something new to an existing product/service

• What is market observation?

  A way of finding a gap in the market. Looking at a particular market and what happens within the market. After doing this, people use the information gathered to try and find a gap in the market

• What is market mapping?

  A way of finding a gap in the market. You place current businesses on a map according to their attributes (price, quality etc) and by doing this you can try and identify a gap in the market

• What is a franchise?

  Where someone, a franchisee, purchases the rights to use another company’s, the franchisor’s, name and products.

• Give advantages of a franchise

  Able to sell a recognised and successful product, take advantage of the experience of the franchisor, benefits from the company’s advertising and marketing without paying for it

• Give disadvantages of a franchise

  Some revenue is lost to the franchisor, lack of ownership, could lose franchise, unable to make decisions

• Give examples of ways stakeholders can influence a business

  Boycotts, petitions, protests, selling of shares, strike, refusal of loans, shut down the business