Why People  Sett up their Own Business

• They want to be their own boss
• An entrepreneur may spot a gap in the market.
• They setup a Business to  generate profit.
• Individuals may decide to start a business because they prefer to be their own boss.  

Goods and Services 

Businesses exist to look after or satisfy these NEEDS and WANTS of consumers.  They make goods such as food products, shoes, clothes and electrical goods.  Some businesses exist to provide services like transport, hairdressing, banking, fast-food take-away and holidays.

Goods and services are the output of business activity.  Goods are tangible products which you can see and touch eg a computer, mobile phone, food items, clothes, DVDs.   

 

 

 

 

Durable goods last for longer than a year eg cars, houses, electrical goods.  Non-durable goods last less than a year eg food, shoes.   

Services are products that an individual or organisation provides for you, eg catering, hotels, travel, banking, Internet services, haircut, utilities (phone, electricity, gas), car repairs, cleaning, retailing (shops). 

 

 

 

 

 

Wealth Creation 

Wealth is created by a business adding value to a product as it goes through the production process. When a red woollen jumper is being made, it goes through the following chain of production. As the jumper moves from one stage to the next, wealth is being created. 

 

 

 

 

 

 

 

 

 

 

This is because value is being added to the price that will be charged by the business for the product. The jumper is worth more as a finished product rather than as a bundle of raw materials i.e. wool, thread etc.