GCSE Business₈₁₃₂

• Purpose of business
• Reasons for starting a business
• Basic functions and types of business
• Business enterprise and entrepreneurship
• Dynamic nature of business

Students should be able to:

• understand what a business is and the reasons for starting a business (including producing goods, supplying services, distributing products, fulfilling a business opportunity and providing a good or service to benefit others)
• understand the difference between goods and services, needs and wants
• understand the meaning of factors of production – land, labour, capital, enterprise
• define opportunity cost
• define the three sectors of primary, secondary and tertiary and give examples of types of business that operate in each sector
• understand the term enterprise and what is meant by an entrepreneur
• outline the characteristics of an entrepreneur, such as hard working, innovative, organised and willingness to take a risk
• outline the objectives of an entrepreneur, including to be their own boss, flexible working hours , to pursue an interest , earn more money, identify a gap in the market and dissatisfaction with current job
• understand that businesses face a constantly changing business environment due to changes in technology, economic situation, legislation and environmental expectations.

• Sole traders
• Partnerships
• Private limited companies (ltd)
• Public limited companies (plc)
• Not-for-profit organisations

Students should be able to:

• understand the different legal structures that businesses adopt
• analyse the benefits and drawbacks of each legal structure (including issues such as management and control, sources of finance available, liability and distribution of profits)
• understand the concept of limited liability and which legal structures benefit from this
• evaluate which legal structure would be most appropriate for a variety of business examples, including new start-up businesses and large established businesses.

Students are not expected to have an understanding of the legal process of incorporation.

• What are business aims and objectives
• Purpose of setting objectives
• Role of objectives in running a business
• Changing objectives
• Use of objectives in judging success

Students should be able to:

• understand the main aims and objectives for businesses: survival, profit maximisation, growth (domestic and international), market share, customer satisfaction, social and ethical objectives and shareholder value
• understand the role of objectives in running a business
• understand how and why the objectives set will differ between businesses (reasons include the size of the business, level of competition faced and type of business (not-for-profit organisations))
• understand how and why the objectives set may change as businesses evolve. Students should consider how the objectives of larger more established businesses might differ from smaller start-up businesses, eg becoming the dominant business in the market, international expansion, increasing shareholder value and ethical and environmental considerations
• understand the success of a business can be measured in other ways than profit.

• Main stakeholders of businesses
• Objectives of stakeholders
• Impact of business activity on stakeholders
• Impact and influence stakeholders have on businesses

Students should be able to:

• understand what is meant by a stakeholder and who the main stakeholders of a business are, including owners, employees, customers, local community and suppliers
• understand stakeholders’ main objectives including maximising pay for workers, minimising environmental impact on local community and high dividend payments for owners
• understand the impact and influence stakeholders have on businesses and their objectives and how businesses may face conflict between stakeholders.

Factors influencing the location decision of a business

Students should be able to understand the factors that influence where a business is located, including proximity to the market, availability of raw materials, labour, competition and costs.

• The purpose of business planning
• The main sections within a business plan
• Basic financial terms
• Basic financial calculations

Students should be able to:

• understand the reasons why businesses create plans, including importance in setting up a new business, raising finance, setting objectives and detailing how functions of a business will be organised
• understand the main sections of a business plan
• analyse the benefits and drawbacks of business planning
• understand the difference between variable costs, fixed costs and total costs
• understand the concept of revenue, costs, profit and loss.

Students will not be expected to write a business plan.

• Methods of expansion
• Benefits and drawbacks of expansion
• Economies of scale
• Diseconomies of scale

Students should be able to:

• discuss the advantages and disadvantages of methods of growth
• understand the methods used by businesses when expanding (organic growth through franchising, opening new stores and expanding through e-commerce , outsourcing and external growth through mergers and takeovers)
• understand the benefits of growth in terms of unit cost advantages due to economies of scale and the drawbacks of growth due to diseconomies of scale
• understand the meaning of purchasing and technical economies of scale
• understand that with growth businesses increase the risk of diseconomies of scale occurring due to poor communication, coordination issues and reduced staff motivation
• calculate and interpret average unit costs.