Generating and Protecting Business Ideas

                                
Sources of business ideas:

The sources of ideas may include brain-storming, your own personal experience and your business experience.

For the exam the generation of business ideas must be in relation to a small business with limited resources.

The identification of a product or market niche:

Niche Marketing: A corporate strategy based on identifying and filling relatively small market segments.

From the video can you identify the possible advantages and disadvantages of this strategy?

Copyright, patents and trademarks:

These give protection to "intellectual property". Do you know what this means?

There is a U.K. government agency called the Intellectual Property Office. One day you may need to register your invention, design or trademark. More details here.

Trevor Baylis invented a clockwork radio. What legal protection would he have applied for? Click on the picture for a link to his website.

The computer 'mouse' was patented in 1970 and its official name was the 'X Y Position Indicator'. At least one billion modern 'mice' have been sold but Doug Engelbart  made very little money. Why?

Click on the picture for the story:



Because of the laws that have been passed to protect intellectual property you would never see this scene in the U.K.
                            

Raising Finance

Sources of finance available to start a business.

Sources of finance should include: ordinary share capital, loan capital (bank loans, overdrafts only), venture capital and personal sources. Candidates should be aware of the advantages and disadvantages of these in specific contexts.

Ordinary share capital or equity:
This represents part ownership of a limited company.
Shareholders may receive a dividend on the capital they invest in the business.

Private limited company (ltd) - you must be invited to invest in the business in return for a share of the equity. Think Dragons Den. 

Check this out: https://www.bbc.co.uk/programmes/m000kqkc

 Apologies for this, but I needed an image here.

A public limited company (plc) can raise vast sums of money through the issue of shares through the stock exchange.

This legal structure would not be appropriate for a small business start up.

The process of changing from  a ltd to a plc is known as a 'flotation' or floating on the stock exchange.

Facebook floated on the 'high tech' US stock market called the Nasdaq. Just how rich did Mark Z become? Google it.

Loan capital - do you understand the difference between a bank loan and an overdraft? If you are unsure check here. Or watch this:


Venture capital: this is also known as risk capital. It provides significant investment into small or medium sized businesses. 

It is generally a investment in return for share capital but may also be in the form of a loan or a combination of the two.

Ali G pitching to a venture capitalist:  
                                                                                                         

Personal sources of finance.
These may include savings, the sale of personal assets or redundancy payments.



Financial aspects of a start up: Innocent Drinks
Click on the picture.

If you're aged 18-30, unemployed or working fewer than 16 hours a week and have a business idea you'd like to explore, The Prince's Trust Enterprise programme could be for you.

Check out this video: https://youtu.be/6op8d3o87LQ 

Locating the Business

Factors influencing start-up location decisions.
                           

The factors should include: technology, costs, infrastructure, the market and qualitative factors. Candidates should understand that their relative importance may vary according to the type of business.

Technology:
How has the development of the internet made the choice of business location much more straight forward?

Many people work from home.



Costs:
Which location would be more expensive?

        

Infrastructure:

The name given to the road, rail and air links together with communication links such as access to broadband.

Most retail businesses are concerned with 'footfall'. What do you think this means?



The market:

Revision exercise - what types of market will you need to be aware of for the May exam?

Qualitative factors:

Can you think of any non numerical factors that may influence the location of a business?

Click on the map and try to list as many as possible.

Where would you locate a car parts business in South London? Why?

Click on the picture.

Business Location PowerPoint:

Understanding Markets

Markets: where buyers and sellers agree the sale of goods or services.

Local markets:

 

National markets:

Physical markets:

Electronic markets:

                                                  

Influences on demand:

-the price of the product

-competitors actions

-consumer incomes

-success of businesses' marketing

-seasonal factors

Market segmentation - analysing a market to identify the different types of consumer. The main ways a market can be segmented are:

Demographically e.g. by age, social class or sex

Psychographically (by attitudes and tastes)

Geographically, by region.

Market size, growth and share.
You need to know the definitions and how to calculate each of these.