Business Activity

What Business Activity covers

Business Activity is examined in Component 01, Business 1: business activity, marketing and people. It covers enterprise and entrepreneurship, business planning and the business plan, sole traders, partnerships and limited companies, business aims and objectives, internal and external stakeholders and organic and external growth.

The 7 subtopics

Each one has its own page.

• Enterprise and entrepreneurshipEnterprise and the entrepreneur, the purpose of business activity, spotting and developing an opportunity, the qualities of a successful entrepreneur, and weighing risk against reward.Open →
• Business planning and the business planWhy businesses plan, what a business plan contains, how it identifies the market, resources and finance, why banks and investors ask for one, and its limitations.Open →
• Sole traders, partnerships and limited companiesSole traders and partnerships with their advantages and disadvantages, limited and unlimited liability, private and public limited companies, and choosing the right ownership as a business grows.Open →
• Business aims and objectivesAims and SMART objectives, survival, profit, growth and market share, social enterprises, how objectives change as a business evolves, and a worked profit target.Open →
• Internal and external stakeholdersInternal and external stakeholders and what owners, employees, customers, suppliers, government and the community each want, why their objectives conflict, and how each can influence a business.Open →
• Organic and external growthOrganic growth through new customers and products, external growth by merger or takeover, horizontal, vertical and backward or forward integration, diversification, and the case for each.Open →
• How business functions depend on each otherHow marketing, people, operations and finance depend on one another, why their objectives conflict, how external changes ripple through every function, and how to weigh evidence from several functions to reach a justified decision.Open →

What you need to know

Answer each one before you reveal it.

Take Business Activity further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Sole trader vs Partnership

  Sole trader: a business owned and run by one person. Partnership: a business owned by two or more people who share profits.

• Limited liability vs Unlimited liability

  Limited liability: owners risk losing only the money they invested. Unlimited liability: owners are personally responsible for every business debt.

• Private limited company vs Public limited company

  Private limited company: a firm whose shares cannot be sold openly on a stock exchange. Public limited company: a firm whose shares can be bought by anyone on a stock exchange.

Questions from this topic

Each one with the model answer underneath.

1. 1

   What is an entrepreneur?

   Model answer

   An entrepreneur is someone who spots a business opportunity and risks their own money and time to act on it.

2. 2

   Define the term enterprise.

   Model answer

   Enterprise is the willingness to take the initiative and the risk needed to start a new business or project.

3. 3

   What is the main purpose of business activity?

   Model answer

   Business activity exists to provide goods and services that satisfy the needs and wants of customers. A business that does this well can earn a profit.

4. 4

   What is a business opportunity?

   Model answer

   A business opportunity is a gap in the market, where customers have a need that no business is meeting well. An entrepreneur who spots one can build a business around it.

5. 5

   How might an entrepreneur spot a gap in the market?

   Model answer

   An entrepreneur might notice a problem in their own life that no product solves. A change in technology or fashion can also create demand that is not yet met.

6. 6

   Why must an entrepreneur develop an idea before launching a business?

   Model answer

   Development turns a rough idea into a product customers will buy at a price that covers its costs. A test of the idea at this stage can reveal problems before money is spent.

What is inside Levo

Six ways to work the same material.

Business Activity revision questions

What does Business Activity cover in OCR GCSE Business?

7 subtopics: enterprise and entrepreneurship, business planning and the business plan, sole traders, partnerships and limited companies, business aims and objectives, internal and external stakeholders, organic and external growth and how business functions depend on each other. Each one has its own page with questions and model answers.

How is Business Activity organised?

By the OCR J204 specification, subtopic by subtopic, so it matches the order you are taught it in.