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1.1 Business by Mind Map: 1.1 Business

1. Natural resources --> Finished goods

1.1. Production

1.1.1. Primary: Gathering natural resources

1.1.2. Secondary: Manufacture & processing raw products

1.1.3. Tertiary: Retail, transport, insurance...

1.1.4. Quaternary: Information providers and research, development...

2. Business

2.1. uses resources to meet costumers needs.

3. Factors of Production/Resources = input

3.1. INPUTS

3.1.1. Land (territory and natural resources)

3.1.2. Capital (money, capital goods)

3.1.3. Enterprise (managing, decision making, coordinating)

4. Goods & Services = output

4.1. Business activity

4.1.1. Adding value to make a product more desirable

4.2. Consumer goods

4.2.1. cars, washing machine, food

4.3. Consumer services

4.3.1. insurance, hotel reservations, tourism

4.4. Capital goods

4.4.1. machines, commercial vehicles

5. Functional departments

5.1. Finance & accounts: Analyzing & providing financial info.

5.2. HR: employee selecting, training and motivating

5.3. Marketing: Market research, identify consumer wants, pricing, promotion.

5.4. Operations management: production stability & quality

6. Countries economic structure = Balance between sectors

6.1. 1) Importance of sectors = employment or output levels

6.1.1. Industrialization = growing secondary sector

6.1.1.1. PROS

6.1.1.1.1. Increasing GDP = Increase in average living standards

6.1.1.1.2. Increasing outputs = decreasing imports and increase in exports

6.1.1.1.3. More jobs

6.1.1.1.4. Profitable firms will give more taxes to the government

6.1.1.1.5. Increase in value to output of raw materials

6.1.1.2. CONS

6.1.1.2.1. Encouraging people moving from the countryside

6.1.1.2.2. Pollution = environmental problems

6.1.1.2.3. Most growth is from multinational companies

6.1.1.2.4. Retaining & recruiting staff will be harder

6.2. 2) Importace of sectors varies between different economies.

7. Reasons to start a business:

7.1. Entrepreneurship

7.1.1. Taking financial risks of starting & managing a new venture

7.1.1.1. PROS of enterprise

7.1.1.1.1. Firms´survival & growth = Growing firms will take the place of those that are declining

7.1.1.1.2. Employment creation = Low national level of unemployment

7.1.1.1.3. Economic growth = Increases output of goods = Increases GDP & tax revenues

7.1.1.1.4. Innovation & Technology = High use of IT by firms = More advanced and competitive business

7.2. More money than what someone´s currently earning

7.3. Desire of independence

7.4. Losing job

7.5. Intrapreneurship

7.5.1. Taking direct responsibility within a corporation to turn an idea porfitable

8. For a successful new business:

8.1. Innovation: carving new niche, attracting costumers, original ideas

8.2. Commitment & self motivation: willingness, hard work, ambition, energ

8.3. Multi-skilled: Different qualities, keen to learn, communication, handling-money abilities

8.4. Leadership skills: Encouraging & motivating others

8.5. Belief in one self: not easily discouraged, being able to bounce back

8.6. Risk-taker: risks like investing their savings or losing jobs

9. For starting enterprise

9.1. YOU NEED

9.1.1. Sourcing capital (finance) = More necessary capital

9.1.2. Building consumer base: Strength of business depends on encouraging customers to return

9.1.3. Determining location: consider minimizing fixed costs. Where are your consumers located?

9.2. PROBLEMS

9.2.1. Competition from other businesses with more experience

9.2.2. Lack of record-keeping: records to pay taxes, bills and chase up debtors

9.2.3. Lack of finance and working capital: limited personal savings, not financial support, poor business plan

9.2.4. Poor management skills: lack of experience in management