1. Business Activity & The Changing Environment

2. Task 1
Write down your name and what grade you would like to achieve in Business & how you expect to get that grade

3. What is business?
A place where a firm buys and sells things in exchange for money
They aim to make a profit
What ways do you think they could make a profit/

4. Your activity
Write down three things that a business may aim to do from the beginning
What do you think their objectives would be?

5. Task 2
Think of 1 business that you are familiar with & write down three things about this business
Why do you think this business is successful?

6. Homework Pick an organisation that you either like or dislike
Research the company and give your findings
Headings may include, company history, products/services, employees, market share etc
Please do not copy from internet

7. Year 10 Business Business activity & the changing environment

8. Objectives
W.A.L.T:
Distinguish between the different types of business organisations
Explain what these different types of organisations offer
W.I.L.F:
You to give your own thoughts& opinions
You to participate
You to work as part of a team

9. Starter activity What are the functions of a business?
List all the people that are involved in a business
What ways can people raise finance for their business?

10. Types of businesses Sole Trade Partnerships
Private Limited Company (LTD)
Public Limited Company (PLC)
Co-operatives
Franchises

11. Sole Trader An individual which trades under his/her own name
Is totally independent
Makes all the important decisions
Responsible for paying all of the debts
Few formalities in setting up
Can employ as many people as he/she wishes

12. Advantages of a Sole Trader
Decisions can be made quickly
Leads to greater interest & more dedicated & hard working owner
Profits are kept by the sole trader
Paperwork is minimal
Easy to start trading as the sole trader
Has close contact with employees and customers
Problems are easier to solve

13. Disadvantages of a Sole Trader
Personally liable for all debts that it occurs (unlimited liability)
Less capital available for expansion
Taxed at a higher rate than a private company
May have difficulty in managing all business functions
When the sole trader dies so does the business
Raising capital could be difficult for one person

14. Examples of Sole Traders
Corner shop
Coffee shop
Carpenters

15. Your task
Suggest two advantages & two disadvantages of a person setting up as a sole trader
List two objectives that a sole trader may have

16. Partnerships Can have between 2 & 20 partners
Set up under the Partnership Act 1890
A partnership deed can be used to set out the rights of the partners
Aim to make a profit

17. Examples of partnerships
Doctors
Accountants
Solicitors

18. Advantages of a partnership
More capital is available than for the sole trader because more people are contributing
Better use of business expertise because each partner can concentrate on what they are good at
Better decision making because decisions are made after discussions

19. Disadvantages of Partnerships
Group decision making may cause conflict between partners
Like sole traders, partners have unlimited liability thus they are liable for all the debts of the business
Decision making can be slower which can lead to inflexibility
Profits must be shared

20. Your task
Why is it important that a business has a deed of partnership?
Why do you think partnerships are a good idea?

21. Key terms Unlimited liability
The owners are personally responsible for paying debts if the business goes bankrupt
Limited liability
If the company goes into liquidation, the shareholders of the company are not responsible for paying the debts of the business

22. Business Activity and the changing environment

23. Objectives
W.A.L.T:
Explain the different types of business organisations
Examine the different finance methods available to business
W.I.L.F:
Your participation
Your ideas and opinions
Complete tasks

24. Starter Activity You have started up your own business in Nottingham
Make a list of all the things which are necessary to make this business successful

25. Private Limited Company
A company that is a legal entity in its own right
It can be sued and can sue
Shareholders own the business
A group of between 2 & 50 people who buy the shares are called the shareholders
Cannot sell shares to the public

26. Public Limited Company
Can sell their shares to members of the public through the stock exchange
Must have at least 7 shareholders with no maximum limit
Must issue a prospective detailing the history of the company & inviting the public to buy shares

27. Public Limited Company
Shares are bought & sold on the stock exchange
Accounts must be published and audited on an annual basis
An annual report must also be compiled each year

28. Advantages of a public limited company
Limited liability
Easier than private limited company to raise capital
Attract top management because of public image
Continuity of existence
Lots of publicity based on stock exchange quotations

29. Disadvantages of a public limited company
High formation costs
Accounts have to be published
Profits must be distributed to shareholders
Ownership & control are separated because although the shareholders own the company the Board of Directors make the decisions

30. Key Terms Shares These are long term sources of finance
Sold to people who become shareholders of the company
A plc is able to advertise its shares for sale to the general public
A private limited company must sell their shares privately
Shareholders
These are people who own part of the Business

31. Sources of finance Internal sources of finance
External sources of finance

32. Internal sources of finance
Retained profits
Stock reduction
Assets sale
Limiting credit to customers

33. External sources of finance
Owners capital
Hire purchase and leasing
Overdrafts and loans
Grants

34. Franchises & Sources of Finance

35. Objectives
W.A.L.T:
Evaluate the idea of owing a franchise& determining what advantages & disadvantages there are associated with it
Distinguish between the various sources of finance available to businesses
W.I.L.F:
You to create a suitable advert for the sale of a franchise
You to answer multiple choice questions and exam style questions

36. Starter Activity
What are the various businesses organisations that we have done?
What is an entrepreneur?
What are the characteristics of an entrepreneur?
What are the two sources of finance called?
List three finance methods associated with each

37. What is a franchise?
Involves paying a fee & agreeing to produce goods exactly in accordance with the franchise company’s policy
Payments are made on a regular basis depending on profits made
Training & supervision are provided

38. Your task Create a newspaper advert selling a franchise Example:
Mc Donald’s largest restaurant for sale as a going concern to suitable franchisee(address)
Excellent trading figures, full training provided. Price £375,000

39. The Stock market Internet site

40. The public and private sector
The public sector includes everything that is owned by the government
Examples-army, police force, schools & hospitals
Public means that they are owned by the government for the benefit of the people who run them

41. The public and private sector
The private sector contains all the businesses owned by private individuals
Almost all the businesses you can think of are in the private sector
Private means that these businesses are run for the benefit of the people who own them

42. Strengths of the free market private sector
Employers & employees can create their own personal wealth through the profit motive & hard work
A greater range of products are supplied
People have greater freedom to choose & but what they want
Competition helps keep prices down & encourages new ideas

43. Strengths of the planned public sector
Public services do not depend on the profit motive & will be supplied even at a loss
The provision of basic services available to all regardless of people’s ability to pay them

44. Objectives W.A.L.T: Outline the various factors of production
Explain how each factor is important to a business
W.I.L.F:
You to distinguish between the different factors of production
You to start working on cash flow and its importance

45. Factors of production
These four factors of production are the resources that are used to produce the economy’s goods & services
Land
Labour
Capital
Enterprise

46. Factors of production Land
All businesses need land to create their products
They may use the land, build on the land or extract from the land
Labour
Businesses need to employ people to make and market their products
The UK’s labour force is made up of all the men & women who are available to work

47. Factors of production Enterprise
The entrepreneur owns the business and is prepared to take the chance that his or her product will be a success
Capital
To make their goods or to provide their services, firms need to invest money in machinery, buildings, vehicles and other major resources

48. Cash Flow

49. Objectives W.A.L.T: Create a cash flow statement
Differentiate between fixed & variable costs & total costs
W.I.L.F:
You to create a cash flow with various figures given

50. Starter Activity-match the key word to the meaning
Sole Trader
You must pay back what you put in & all debt
Entrepreneur
You only lose the amount of money put into the business
Limited Liability
An individual willing to take risks in setting up a business
Unlimited Liability
Business organisation that is owned by a single person

51. Cash Flow Is the flow of all money into and out of the business
Cash flow is important because if there is not enough money flowing in you don’t have enough to pay bills

52. Poor cash flow=big problems
Not enough cash to pay daily expenses
Lack of working capital
Staff don’t get paid on time
Creditors may not get paid on time
May become bankrupt

53. Your task What is a cash flow?
Why should a business prepare a cash flow?
Why does a business need to keep an eye on their finances?

54. Reasons for preparing a cash flow
Lets a business know if they will have enough money to meet payments due
Indicates which months there will be a cash shortage

55. How to prepare a cash flow
Estimate money coming in
Estimate money going out
Subtract payments from receipts
The closing balance will be the opening balance for the following month

56. The different costs involved
Fixed costs:
Costs which have to be paid no matter what has been sold or produced
Variable costs:
Costs that vary according to the amount produced or sold
Total costs:
Fixed costs + variable costs

57. Tick which source of finance is necessary for the following
Short term
Medium term
Long term
Stock for resale
10, 000
Premises
120,000
Machinery
50,000
Vehicles
18,000
Land
60,000
Oil
2000
Wages
1800
Telephone
400
Computers
6000

58. Objectives
W.A.L.T:
Distinguish between the various types of stakeholders
Match the type of stakeholder to a various aim
W.I.L.F:
You to relate questions to lessons that we have completed already

59. Starter Activity Customers are an example of a firm’s ------------(12)
Business objectives are set by the (6)
An example of an internal stakeholder group is (9)
Public sector organisations have objectives based on (7)

60. Stakeholders Internal-owners, managers, directors Variable costs:
External-local community, bank, suppliers

61. Your task
Select a business of your choice and write about the various stakeholders that would be affected by it

62. Match an appropriate aim to each stakeholder group
Customers
No pollution
Local Community
A return on their investment
Lenders
Job security
Employees
Lower prices

63. Judging success-how are objectives measured?
Size
Turnover/market share
Shareholders
Number of employees/staff turnover
Customer satisfaction/number of complaints

64. Factors of production

65. Objectives
W.A.L.T:
Examine the different factors of production and how they affect a business
Relate the factors of production to a particular business situation
W.I.L.F:
Your thoughts and opinions based on these topics and how they would relate them to a particular business scenario

66. Starter Activity What are the four factors of production?
Explain what is meant by each of those factors
Fill in the blanks:
Employees earn -----(w)
The owners of capital receive (I)
Entrepreneurs make (p)
The owners of land receive ----(R)

67. Areas to be covered Primary Industry Secondary Industry
Tertiary Industry
Employment

68. The primary industry
These are businesses that extract something e.g. coal, oil, stone, fish and ore
The location of these businesses usually depends on where the resources being extracted are found

69. The secondary industry
Theses are businesses that construct or manufacture something
Their location is influenced by many factors such as government support and the existence of a suitable labour force

70. The Tertiary industry
This is the service sector and supports the other two industries
Services include transport, finance, insurance, training and advertising
Their location will be influenced by the services required by firms in the other two industries

71. Your task
Classify each of these businesses as either primary, secondary or tertiary:
A specialist distribution firm
A builder
A building society
A forestry plantation
A computer manufacturer
List four major influences on location

72. Objectives
W.A.L.T:
Distinguish between the different types of production
Categories different items into the correct production method
W.I.L.F:
You to distinguish between the different production methods and give relevant examples

73. Starter Activity Factors of production –jumbled up words
Access business studies on line

74. Methods of production Job production:
when a business makes a single one of product
The job is often built by skilled labour working to the customer requirements
Since only one item is made the business may not gain economies of scale

75. Methods of production Batch production:
When there is more than one item made
Each batch of products are finished before the next batch

76. Methods of production Mass production
When identical items are made on a production line
The product moves from one stage to the next

77. Chose either job, batch or mass
Cans of paint
A factory extension
Shoes, size 7
Television
The channel Tunnel
State one advantage and one disadvantage of mass production

78. Starter Activity Refer to hand out sheet Also grade or no grade quiz

79. Factors of location & PEST analysis

80. Starter Activity Describe what is meant by batch production
A cost which remains the same regardless of the level of production is _____ cost
A cost which changes according to the level of production is a _____ cost

81. Developments in production
Just in time-only buy stock as you need them, no need for additional storage facilities
Cell production-where people make a particular part of the product and moves continually
Kaizen-invest in skilled people rather than technology ( continuous improvement)

82. Lean production
Refers to the various ways that are now used to improve the efficiency of production
Tries to cut development time
Associated with just in time, cell production and the Kaizen system

83. Your Task
Choose an organisation of your choice and outline what type of production mostly suits them and give relevant reasons why

84. The Government
They create various laws and regulations that affect businesses
The EU and the UK Government also support firms
The Government want to be paid VAT and taxes

85. The P.E.S.T analysis
15th October 2007

86. Objectives
W.A.L.T:
The importance of the p.e.s.t analysis on a business
Distinguish the difference between P.E.S.T
W.I.L.F:
You to relate the p.e.s.t analysis to a particular business (case study)

87. The PEST analysis Refer to the handout
A scan of the external macro-environment in which the firm operates can be expressed as;
Political
Economic
Social
Technological

88. The steps involved Environmental Scan External analysis
Internal analysis
Microenvironment Ma
croenvironment
P.E.S.T

89. Political Factors These include government regulations & legal issues
Defines both formal & informal rules
Examples-tax policy, employment laws, environmental regulations, trade restrictions and tariffs, political stability

90. Economic Factors
Economic factors affect the purchasing of potential customers and the firms cost of capital
Examples-economic growth, interest rates, exchange rates, inflation rates

91. Social Factors
These include demographic and cultural aspects of the external microenvironment
These affect customer needs and the size of potential markets
Examples-health consciousness, population growth rate, age distribution, career attitudes, emphasis on safety

92. Technological Factors
These can lower barriers to entry, reduce minimum efficient production levels and influences outsourcing decisions
Examples-research and development, automation, technology incentives, rate of technological change

93. Case study Relate to the p.e.s.t case study
Read through case study and answer questions based on this case study

94. The Business Cycle
This shows the regular patterns of upturns and downturns of the level of output in the economy
Goes through stages-boom, slump, recovery
Diagram
The business cycle business studies on line part

95. The phases
Boom-is the part of the business cycle in which output rises
Slump-is a severe form of recession
Recovery-is the part of the business cycle when output begins to grow again after a slump

96. Your task
Look at the shops, offices or factories in Witham. Have any of them opened or closed recently?
Are there other reasons or is it a result of the business cycle

97. The E.U

98. Objectives W.A.L.T: Understand the purpose of the European Union
Determine what has happened since the introduction of the E.U
W.I.L.F:
You to answer the questions based on the European Union

99. Starter Activity
The face off quiz on where you answer a series of questions based on the E.U

100. What is the E.U? This is a political and economic community
Made up of 27 countries member states located in Europe
In European countries formed the European Economic Community (EEC) by the Treaty of Rome

101. What has happened since then?
The EU has grown in size through new member states
In 1993, the Maastricht Treaty established the base of the current legal framework

102. Task 1 Write down three things that you know about the E.U already One
Two
Three
Compare answers and then list on board

103. The purpose of the E.U
The EU created a single market which seeks to guarantee the freedom of movement of people, goods, services and capital between member states
It maintains a common trade policy, agricultural and fisheries policies and a regional development policy

104. Advantages of the EU
Free Trade (no tariffs or quotas) benefits industries as they have a larger market to sell their goods to
Greater co-operation between countries should prevent the outbreak of war between members
Greater cultural understanding results from freedom to travel within the EU
The E.U has a greater influence on world events than the individual countries could have
European Union regional development funding has improved conditions in the poorer countries and areas

105. Disadvantages of the E.U
Goods cost more to import from non-EU countries due to tariffs
E.U funded schemes such as the Common Agricultural Policy, are expensive, inefficient and sometimes corrupt
It reduces the political independence of each country-decisions are taken for all countries by the European Parliament

106. Task Two Look at the handout regarding the history of the E.U
Draw arrows to link to the correct sequence of events
Discuss with your partner and then draw in the arrows

107. The European Union

108. Introduction of the euro
In 1999 the EU introduced the euro
Has been adopted by 13 member states

109. Your task Name the country www.businessstudiesonline.com
The drag and drop section

110. Members of the E.U Moldova Slovakia Estonia Iceland U.K Luxembourg
Czech Republic
Poland
France
Albania
Sweden
Lativa
Serbia
Belgium
Moldova
Slovakia
Estonia
Iceland
U.K
Luxembourg
Romania

111. Members of the E.U Bulgaria Switzerland Greece Finland Ukraine Spain
Ireland
Hungary
Austria
Italy
Lithuania
Montenegro
Slovenia
Denmark
Malta
Belarus
Netherlands
Cyprus
Norway
Germany
Potugal

112. Business and the EU Has helped increase trade between member countries
Businesses has the opportunity to expand
The Eu has tried to protect businesses by imposing custom duties on goods imported into the EU

113. Homework Essay (Red tasks)
Why are more countries wanting to join the European Union/ What might their concerns be?
Yellow tasks
Create a poster about the European union. On the poster include a small map of the E.U, information about the E.U, the countries in the E.U and the purpose of the E.U

114. Importance of the E.U
The European Union contains four of the world’s major economic powers;France, Germany, Italy and the U.K
The E.U is now the UK’s main market

115. U.K imports in 2000 The EU=58% Rest of Europe=6% North America=15%
Rest of the world=21%

116. U.K Exports in 2000 The EU=54% Rest of Europe=7% North America=15%
Rest of the world=24%

117. The single market
Promoting trade between the member states was a major influence in establishing the EU
Its common market is now a single market consisting of about 400 million people

118. Purpose of the single market
Free movement of people (labour)
Free movements of goods (no internal tariffs)
Common technical and other standards

119. How the single market has influenced UK businesses in several ways
Common standards of quality and safety
Open market encourages competition
Free movement of labour and good encourages employment and skills development

120. The monetary union
Economic and monetary union is closely linked with the euro and eurozone
The single currency will affect the EU:
Trade will be valued in euros, exchange rate fluctuations will have an impact and also price difference may cause problems

121. Your task In the EU what is the social charter?
What is the difference between the eurozone and the euro?
What does the EU’s single market seek to do?

122. Answers A charter protecting the rights of workers
Eurozone is the member states who have signed up to the single currency. The euro is the name of the single currency
Provides free movement of labour and goods and establish common technical standards

123. Plenary
Test the person beside you regarding the true and false statements and see if their answers have changed

124. Objectives W.A.L.T: Determine how businesses grow
Discuss how businesses grow internally
W.I.L.F:
You to create a spider diagram outlining how businesses grow
You to participate and engage fully in lesson

125. Starter List ways that a business may grow
Create a spider diagram to display these

126. How a business grows
There are several methods to measure an organisation’s size:
Profits
Turnover
Employees
Capital employed

127. Profits and turnover
Profits-how much the business keeps from selling its goods and services
Turnover-the sales that the business makes

128. Employees and capital employed
Employees-the number of people employed in the business
Capital employed-the resources the business has invested in it

129. Key terms For a firm, greater size through growth makes:
Economies of scale possible
Survival more likely

130. How can firms grow internally?
They grow organically
Can grow through mergers or takeovers
This usually happens when an organisation sell more of its existing products, starts selling new products and when businesses enter new markets

131. Integration In a merger two companies agree to join
This external growth is the quickest way for organisations to grow
In a takeover one company buys enough of another company’s voting shares to take control

132. Economies of scale
They are the reasons why the average cost of production may fall with increasing levels of output
What is your opinion? Would it be a good idea for a company to produce in large amount or do you think they should only produce as needs be

133. Task
You own a small business and you want to ensure that your business provides the best possible service to their customers
Create a questionnaire finding out if customers are happy with the service they are getting from your company

134. Starter Activity Merger Takeover Turnover Retained profits
The businesses own money that is ploughed back in
Takeover
If large amounts are made and it reduces the average cost
Turnover
When one company buys enough of another company’s voting shares
Retained profits
Way of comparing a businesses size
Economies of scale
Takes place between two companies through their agreement

135. Externalities
All businesses bring benefits to people and others outside the business this is called externalities
Externalities are costs or benefits arising from business activity that are experienced by people or organisations outside the firm

136. Example A new housing developing is opening up in Witham
They are aimed at people from deprived areas
These people have been involved in crime and substance abuse
You must outline the negative and positive externalities associated with this venture

137. Your task
Create a spider diagram showing the positive and negative externalities
Positive
Negative

138. Year 10 Business
Monday

139. Objectives W.A.L.T: Distinguish between imports and exports
Distinguish between visible and invisible trade
W.I.L.F:
You to complete the starter activity
You to answer the questions based on importing and exporting

140. Starter Activity Home Trade The export and import of services
Importing
Selling to other countries
Exporting
The import and export of goods
Visible Trade
Buying or selling to people in same country
Invisible
Buying from other countries

141. Trading Is the buying and selling
Home trade is when businesses buy or sell goods to people in the same country
When businesses buy or sell from other countries outside the home country is foreign trading

142. Importing vs. exporting
When businesses buy goods or services from other countries is called importing
When businesses sell goods or services to another country is called exporting

143. Visible trade Is the export and import of goods
Dairy produce, livestock, machinery, oil, clothes, shoes are all examples of visible trade

144. Invisible trade Is the export and import of services
When Americans or other foreign tourists come to the U.K on holidays, it is an example of invisible trade

145. Your task
Outline on a spider diagram the reasons why the U.K imports and exports
Importing
Exporting

146. Reasons for importing Climate is not suitable to produce all crops
Lack natural resources
Needs to import certain raw materials
Wider choice

147. Reasons for exporting
Easier for the U.K to produce agricultural produce because of climate
Businesses need more than the home market
Creates extra employment
Foreign currency

148. Task Explain the difference between home trade and foreign trade?
Give three reasons why the U.K imports goods from other countries
Why do we export to other countries?

149. Task-tick the correct answer
Exports
Imports
U.K tourists going to Italy
U.K computer parts sold to France
An U.K business buying parts from China

150. Year 10 Business
Wednesday

151. Objectives W.A.L.T: Distinguish between the various types of finance
Distinguish between ordinary and preference shares
W.I.L.F:
You to attempt the starter activity
You to complete all the relevant task

152. Starter Activity Why do businesses need finance?
Give two examples of sources of finance
Give two examples of each of the two finance types

153. Internal sources of finance
Retained and using profits
Selling assets
Using trade credit
Investing any surplus cash
Reducing stocks held

154. External sources of finance
Personal savings
Borrowings
Issuing shares
Loans and mortgages
Overdrafts
Factoring debts

155. Types of shares Two types of shares-ordinary and preference
Ordinary shares allow holders to vote at company meetings
This makes an ordinary shareholder an owner of the company

156. Preference shares
These don’t usually give their holders the right to vote at company meetings
Preference shareholders receive priority over ordinary shareholders when it comes to paying dividends and repaying capital

157. Your task List three reasons why businesses need finance
State two differences ordinary shares and preference shares

158. Ordinary and preference shares
Voting rights?
Normally one per share
Usually non-voting
Dividend Payment?
Variable
Fixed
Capital repaid?
Paid after preference;repaid last
Paid before ordinary;repaid before ordinary

159. Homework
Red task-Choose a business of your choice and explain what source of finance would be most adequate for that business to grow
Yellow task-Write a letter to a company of your choice explaining the difference between ordinary shares and preference shares (you must research)