•changing technology- make products faster, smaller, cheaper, safer, easier.                   •Changing customer needs-fashion, economy, national demographics, lifestyle , technology.                                  •Find gap in market through market research            

•Business success.                                     •personal satisfaction.                         •profit.                                                         •independence 

•Business failure.                                      •financial loss.                                            •no guaranteed income

•market research.                                        •business plan.                                            •sufficient starting finance

A calculated risk taker who runs and owns a business, takes calculated risks, organises resources, make business decisions and employ people.

=Difference between price of product and cost of making product.         •USP- product stands out from competitors.                                                •Design.                                                   •Quality-customers willing to pay more •Better service.                                         •convenience

What is adding value and what are methods of adding value?

Helps a business understand it’s customers, competitors and market. Finds gaps in the market.

Qualitative information that didn’t exist before.

•surveys, focus groups,questionnaires,social media(access to range of market segments) 

•more accurate to business.                  •up to date.                                              •specific to needs                                     •qualitative 

•time consuming.                                       •expensive

What are disadvantages of primary research?

Quantitative information that already exists.

•Online sites.                                         •newspapers.                                             •market reports.                                       •government reports.                                •sales data

•more general.                                         •less time consuming.                             •Quantitative

•good customer and business relationship=trust to brand=good brand image=generates more sales

A group of buyers with similar characteristics and buying habits.

Allows business to understand customer needs

•meet customer needs.                            •differentiate products.                          •Develop unique brand image.                    •build relationships with customers. 

•focusing on one group can lead to missing a business opportunity.               •expensive.                                              •characteristics change= may be unreliable

What a business hopes to achieve in long term.                                              e.g. expand to Europe

Specific Steps taken to achieve the aim.                                                       e.g •increase % of sales in Germany in several months.                                     

survival, sales, revenue, profit, market share, established customer base

personal satisfaction, awards, recognition, independence, customer satisfaction

When business makes neither profit of loss.

•If total revenue exceeds total costs=profit.                                               •if revenue sales are below total costs=loss

How much production can fall before a business makes a loss

Graph that predicts how cash will flow over time.

•pay suppliers.                                         •pay debts e.g. loans.                               •pay wages to employees.                      •buy raw materials.                                  •promote the business

•change in costs in business.                  •seasonal products.                                  •business expansion.                              •change in demand.                                •paying bills or invoices.                         •changes in laws e.g increase in national minimum wage

Owner can lose personal assets if debts not payed 

•Owner has control.                                 •owner keeps profits.                               •financial accounts kept private 

•more risk of takeover of business.       •More risk of losing personal assets if debts are not payed

Owners personal assets are protected if debts are not payed.

•reduced risk of losing personal assets if debts not payed.

•Owner risks losing control.                     •profit shared as dividends.                   •Financial accounts are public

•makes all decisions.                               •Quick and easy to set up.                       •keeps all profit.                                       •financial information kept private 

•unlimited liability.                                  •no guaranteed pay (sick pay, holiday). •lot of pressure.                                     •harder to raise money- banks won’t easily trust sole trader business for loans

•owners share risk.                                  •more expertise.                                      •easier to raise finance 

•decisions made by one partner affects all partners.                                  •profits are shared.                                •disagreements cause arguments that affect the business 

Incoorporated business owned by shareholders. Shared brought priveatly.

•limited liability- protected assets.         •trusted as it is a incoorporated business.                                                  •easier to raise finances through selling shares

•harder to set up.                                   •shareholders can disagree.                  •financial information is published.        •Financial information should be reported to the government

incoorporated business owned by shareholders. Shares sold publically.

•easy to raise finance through share capital.                                                      •limited liability.                                       •trusted because it is an Incoorporated business.                                                 •better public awareness.                   •allows business to grow into a multinational company 

•harder to set up.                                    •harder procedures.                                •risk of takeovers.                                  •financial information published.           •increased public attention

Disadvantages of a public limited company

Right given to a business to sell goods using its name and products

•Brand image and reputation already established.                                           •marketing costs already covered.      •access to established products.         •support and training provided.   

•expensive initial investment.                 •little freedom on decisions.                   •franchisee has to pay a fee.                  •restrictions set up

•market.                                                    •transport.                                               •competitors.                                           •labour.                                                      •materials. 

Requires to be near resources and away from local residents.

How does the nature of a manufacturing business influence location?

How does the nature of an exporting business influence location?

Business has to be near customers e.g. a busy street or tourist area.

How does the nature of a retailing business influence its location?

The business has to be near tourist attractions.

How does the nature of a tourism business influence its location?

Helps business to identify and understand customer needs.

Has to meet customer needs and be differentiated.

Has to be accessible to customers. A way in which a product is distributed.

Advertising, sales promotions, sponsorship, public reactions.

•New trends-change features.                 •competitor pricing-adjust prices.          •falling sales-new advertising method.   •selling products through popular retailers.                                                      •Letting customers return products for free. 

•price-compare prices with competitors to remain competitive.         •product-products have to be innovated to latest technology.              •place-locate business online/e-commerce to save rent costs.                 •promotion-Social media for advertisement. 

•paying expenses •expand business   •starting new business. 

Agreement with bank to spend more cash than in their account. 

+Quick to arrange.                                  -Interest charged.                            -Only small amounts can be taken. 

Advantages & Disadvantages of bank overdraft. 

Paying for goods later 30-90 days when they already have been sold. 

+No interest +Quick access to supplies -Must be payed back

Advantages & Disadvantages of Trade credit

•personal savings. •venture capital. •Share capital. •loan. •retained profit. •crown funding. 

+quick & convenient.                          +no interest has to be payed                  -May not be enough for investment.      -Once money is used, it’s gone. 

+Quick. +can raise lots of cash quickly. -Owner loses control of business.        -Investors may have different views for business. 

Money raised by shareholders through shares  

+Lots of cash quickly +No interest.         -Loss of business control.                -risk of takeover                -shareholders receive dividends 

+Easy & quick to access.                       -Have to pay interest.                              -hard of new business to access due to lack of trust. 

Keeping profit and re-investing it back into the business. 

+Quick & convenient. +easy to access.   +No interest payments.                         -Once money is used, it becomes unavailable for business emergencies.   -Takes long time to collect. 

Raising cash by large number of people for a reward. 

+Acts as market research to get to know if people are interested.               -Difficult to reach target cash goal. 

A diagram that compares products & used to find gaps in the market. 

+Helps find gaps in market=USP opportunity.                                              +Helps to identify competitors.            +Helps to make decisions In marketing. +Supports market segmentation.                             -unaccurate=can be based on opinions -Business only compare 2 variables=simplistic.                                    -Difficult to identify most important variables.   

Where raw materials are sold.                -Commodity market prices always change due to changes in demand. Normal market prices more stable.  

Price of borrowing cash as a percentage of the amount borrowed. 

•Businesses that depend on loans may struggle= insolvency.                            •small businesses unable to borrow cash to start up or expand.                    •Customers less likely to spend money as borrowed cash costs more. 

•Businesses have more cash to spend & cashflow will improve.                          •Businesses can borrow cash to start up or expand.                                          •customers more likely to spend more=customer spending increases=more revenue. 

Value of currency in other foreign countries. 

+cheaper imports=lower costs.              -cheaper imports=fewer UK sales as customers will buy cheaper goods from abroad.                                                      -Prices expensive for tourists=tourism falls.                                                           -Exporters sales fall= expensive for foreign customers. 

+Exporter sales will rise=Cheaper exports for consumers=better economy.                                               +Cheaper prices for tourists=rising tourism.                                                      +people buy more UK goods as imports are expensive=benefit UK businesses.                                               -Imports expensive=more costs. 

+consumer incomes rise=more spending.                                                  •inflation rises. •pound stronger.           •unemployment falls.                    •higher interest rates 

-consumer incomes fall. •inflation falls.  -unemployment rises.               +interest rates fall.                       •pound weaker

+easier to recruit new employees.        -Necessary Skilled employees will fall.     -Reduces customer demands & spendings=Business sales will fall=reduced economic activity. 

-rising business costs=negative cashflow.                                               -consumer costs rise=but fewer goods. 

People who have an interest in the business & are affected by it. e.g. owners, employees, locals. 

+accessible 24/7.                             +less marketing costs.                          +save cash on location and staff.           +Larger access to international customers. 

English (UK)

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Diana Williamson

United Kingdom

DEFAULT (England)

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Edexcel GCSE Business Paper 1

Revise Edexcel GCSE Business with condensed notes including all units. Download your GCSE Business Studies revision guide and study guide. Perfect for Business Paper 1 revision and Edexcel Business topics. Get your Edexcel GCSE Business study guide 2021 here!

Edexcel GCSE Business Paper 1 Revision Notes PDF for 2021

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Edexcel GCSE Business Paper 1 Revision Notes PDF for 2021

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