AQA GCSE Business Unit 3.1.1 The purpose and nature of business This PowerPoint covers these topics: 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

1. GCSE AQA Business
3.1.1 The purpose
and nature of businesses

2. Lesson objectives 1/2
Students should be able to:
1. 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)
2. understand the difference between goods and services, needs and wants
3. understand the meaning of factors of production – land, labour, capital,
enterprise
4. define opportunity cost
5. define the three sectors of primary, secondary and tertiary and give
examples of types of business that operate in each sector

3. Lesson objectives 2/2
Students should be able to:
6. understand the term enterprise and what is meant by an entrepreneur
7. outline the characteristics of an entrepreneur, such as hard working,
innovative, organised and willingness to take a risk
8. 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
9. understand that businesses face a constantly changing business
environment due to changes in technology, economic situation,
legislation and environmental expectations

4. You need worksheet 3.1.1 for this lesson

5. Starter - 3 quick questions
• What do you need?
• What do you want?
• Why are these different lists?

6. Definition: Needs
•There are some goods we (as humans) need:
•Water
•Shelter
•Heat / light
•Food

7. Definition: Wants
• There are some goods we (as consumers) want:
• A gold watch
• A fast car
• A new phone
A business will need to work out what customers need and want so
they can satisfy those needs

8. Purpose of a business

9. What is a business?
• A business is an organisation which
trades to make money, these come
in all shapes and sizes
• The business could be one person;
an electrician for example, who
goes to customers’ houses and
fixes their electrics in return for
money
• The business could be a giant
supermarket chain, for example
ASDA, which sells food and other
goods for money

10. What is a product?
• A product is anything that is
capable of satisfying customer
needs, it is tangible and can be
touched
• Examples of products are:
• Cars
• Washing machines
• Nail varnish
• X box consoles
• Mobile phones
Can you give 3 more examples of
products?

11. What is a service?
• A service is an act that a business
person carries out for you in
exchange for money, for example:
• Dental treatment
• Accountancy
• Gardening
• Cleaning
• Hairdresser
• You cannot physically touch a
service it is intangible
• Can you give 3 more examples of
services?

12. Goods or services?
A B
C D

13. Factors of production

14. Factors of production
To produce goods and services four things are needed:
• Land – somewhere to produce the goods e.g. a farm
• Labour – people to work in the business e.g. farm workers
• Capital – money to get the business started
• Enterprise – This is the drive or motivation from the owners to
start a business
• These are the 4 factors of production

15. Identify the factor of production in the pictures
B

16. Opportunity cost
The problem:
• Land, labour, capital and enterprise
are all limited resources
• However our wants are unlimited
• This causes scarcity
• As business people we need to
decide how best to use those
scarce resources, we make choices
• For example a factory needs to
decide if they should produce cars
or vans
When making important
decisions in business, the
cost of not selecting an
alternative, is called an
opportunity cost

17. Suggested activity
Create a poster to show the four
factors of production:
• Land
• Labour
• Capital
• Enterprise
Website to help: LINK
Good place to start: Look at
different versions from a
Google image search
Extension: Include opportunity cost

18. Reasons for starting a business

19. Reasons for starting a business introduction
• There are lots of reasons why business owners wanted to start their
own business, these are the ones that AQA would like you to be able
to discuss:
1. To produce goods
2. To supply a service
3. To distribute products
4. To fulfil a business opportunity
5. To provide a good or service to benefit others

20. #1 To produce Goods
• For example, Jamal is an
accountant, but in his spare time
he enjoys working with wood.
• He decides he would like to make
carvings and sell them.
• This way he can turn his hobby into
his job
• Jamal starts a business producing
wooden figures to sell
• Is Jamal selling products or
services?

21. #2 To supply a service
• For example Sandrine works as a
cleaner in a school
• She decides to start her own
cleaning business so that she
can be her own boss and keep
the profit
• She starts a business to supply a
cleaning service
• Why is cleaning a ‘service’ and
not a ‘product’?

22. #3 To distribute products
• For example, Logan works in his
Uncle’s cycle shop at the weekends
while he is studying at college
• When he finishes college he
decides to set up a business as a
UK distributor for recumbent cycles
• The cycles are made in Ireland, and
imported into the UK
• Logan’s business sells and delivers
them to the cycle shops to be sold
on to customers
• What is a recumbent cycle?

23. #4 To fulfil a business opportunity
• For example, Michelle Doherty
says that during her almost 14-
year battle against chronic acne
she tried everything in an
attempt to cure it
• So she developed her own
product Alpha-H which now
includes Kylie Minogue as a fan
of the brand and is sold all over
the world

24. #5 To provide a good or service to benefit
others
• A social enterprise is a business
which has the objective of trading
to help people or the planet, rather
than making a profit
• Morgan has decided to start a
social enterprise. She has spent
two years volunteering at a
homeless shelter and now things
she has found a way to produce
and trade goods made at the
shelter to help fund more craft
activities in the future

25. Definition: Social enterprise
• In a social enterprise the social or environmental objective is central
to the business activity. It is equally as important as the profit.

26. Social enterprises
Objective: to help the community
• To tackle the effects of poverty
• To provide jobs
• To help older citizens
• To help children
• To help the homeless
Objective: to help the planet
• To reduce pollution
• To tackle deforestation
• To halt climate change
• To reduce environmental
hazards

27. Basic functions and types of
business

28. Three business sectors: introduction
• There are three main sectors in business (geography might argue 4,
but in business we have just 3). These are:
1. Primary
2. Secondary
3. Tertiary

29. Primary sector
• The primary sector extracts raw
materials from the planet
• For example; mining diamonds,
coal or other precious metals,
chopping down trees for wood
• In the primary sector goods such
as; wheat and barley could be
grown on farms
• Other goods could be collected
such as; strawberry picking or
fishing

30. Secondary Sector
• In the secondary sector goods
are manufactured from raw
materials into finished goods
• For example plastic, metal and
other materials are made into
cars
• Other examples is that eggs,
butter and sugar are made into
cakes

31. Tertiary Sector
• The tertiary sector is all the
support services for business
• Examples are lorries and
transport of goods
• The tertiary sector includes
shops, retail, banking and
insurance

32. Mini plenary: Primary, secondary, tertiary?

33. Mini plenary: answers
Primary Secondary Tertiary Primary
Tertiary Secondary Tertiary Primary

34. Suggested activity
Create a poster or diagram to
show the 3 sectors of the
economy and the kinds of
businesses that might operate in
each of the sectors:
• Primary sector
• Secondary sector
• Tertiary sector
Try using really bold images to illustrate each of
the sectors
Extension: create a infographic

35. Business enterprise and
entrepreneurship

36. Definition: Entrepreneur
• A person who starts a business and takes on financial risk in the hope
of making a profit

37. Characteristics of entrepreneurs:
introduction
• There are lots of characteristics of successful entrepreneurs and AQA,
your exam board, would like you to know about these four, so get
ready to make some notes:
1. Organised
2. Hardworking
3. Innovative
4. Willing to take a risk

38. #1 Organised
• Entrepreneurs need to be very
organised when starting their
own business and when it is up-
and-running
• They will have to organise their
accounts, their folders,
information about their
customers
• Have a look at the Hissy Fit
website and see how organised
the entrepreneur Danielle is.

39. #2 Hard working
• Entrepreneurs may have to work long
hours to make the business successful
• If they work from home then they
might work evenings and weekends to
get the business started
• Watch the video and find out who
Levis Roots is, why is he a good
example of a hard working
entrepreneur?
• Have a look at the website how many
products does his business make
now?
WEBSITE LINK HERE

40. #3 Initiative
• Initiative means; inventiveness,
ingenuity, and resourcefulness
• Many entrepreneurs may start a
business because they have a
good idea and want to take it to
market, this shows that they
have initiative
• Watch the Wand Company
present in the den: VIDEO
• How do the products on their
website show initiative? WEBSITE LINK HERE

41. #4 Risk taker
• Many entrepreneurs risk
everything on their idea and may
lose their own savings in their
quest to start their own business
• Kirsty was a single mum who
worked two jobs and came up with
her dairy free ice cream, to make a
pudding for her son who had food
allergies
• Have a look at Kirsty’s website,
why is she a risk taker? WEBSITE LINK HERE

42. Entrepreneur objectives: Introduction
Entrepreneurs can have lots of varied objectives. These are the ones that
your exam board would like you to know about. Get ready to make some
notes on the following slides.
1. To be your own boss
2. To work flexible hours
3. To pursue an interest
4. To earn more money
5. To identify a gap in the market
6. Dissatisfaction with current job

43. #1 To be your own boss
• A reward of setting up a business is
that the entrepreneur could be her
own boss
• This means the entrepreneur gets
to make the major decisions in the
business
• Many people would like to have
this degree of control in their
working lives, which motivates
them to start their own business
• How did Rob Law get on in the
Dragons’ Den?
• Have you ever seen his products? WEBSITE LINK HERE

44. #2 To work flexible hours
• One advantage of running a
business is that the
entrepreneur could take holidays
when they want
• This means that they could have
holidays out of peak times when
prices are cheaper, take care of
children, or have a hobby
• They can work the hours that fit
in with their life, which is called
a ‘work-life balance’

45. #3 To pursue an interest
• Opening a business can bring a
great sense of satisfaction to the
owner
• If the work is meaningful, they
might be more likely to stick with it
in the long run, which means they
will be more successful as a result
• If the entrepreneur is passionate
about something (football, horses,
playing Xbox or even sewing) they
might want to turn this into a
business

46. #4 To earn more money
• A reward of setting up a
business is that the
entrepreneurs get to keep all the
profit that the business makes
• If the entrepreneur’s business is
successful, they may possibly
make more money than if they
were on a fixed salary, and
working for someone else's
business

47. #5 To identify a gap in the market
• Entrepreneurs may spot a ‘gap in
the market’ which is something
that customers need but isn’t
currently available
• This might mean that they have
adapted an existing product or
made a new one from their own
ideas
• A gap is an area that current
businesses are not serving and
where customers’ needs are not
being met

48. #6 Dissatisfaction with current job
• Entrepreneurs may have become
unhappy in their job, so wanted to
start a business instead
• They may have worked in an
industry that they want to move
away from, but without experience
the only way to change jobs is to
start a company and work for
themselves
• Have a look at the video, what
were the reasons that TED wanted
to leave his job?

49. Dynamic nature of business

50. Definition: Dynamic business environment
• A dynamic business environment is one that is constantly changing.
For example, when the UK government introduced new laws on
minimum wage, this will have had an impact on the costs of many
businesses.

51. Dynamic business environment introduction
• Business faces a constantly changing environment, to which it must
adapt, this is due to:
1. Changes in technology
2. Changes in the economic situation
3. Changes in legislation (laws)
4. Changes in environmental expectations

52. #1 Changes in technology
• Changes in technology have had an
impact on business in many ways:
a. Cheaper than ever to sell online
and deliver to customers (Amazon)
b. Easier than ever for a small
business to sell on online platforms
(eBay, Etsy)
c. New technology means lots of new
products to sell to customers (echo,
air pods, VR)
d. Social media developments means
that companies can reach and
interact more with their customers
(Twitter, Instagram, Facebook)

53. Suggested activity
Carry out some research and write
a one page factsheet. The title is
“Changes in technology”.
You may wish to focus on:
*Streaming
*Virtual Reality
*Robotics
*The internet of things
Explain how they impact business
Add an image to illustrate one of the changes
Extension: add an evaluation, which would
have the biggest impact on business and
why

54. #2 Changes in the economic situation
The economic situation in the UK will
have an impact on business in many
ways including:
• If interest rates rise then the cost
of borrowing will rise and
customers will buy less goods
• If the unemployment rate rises
then more people have no job and
less money, which will reduce the
amount of goods that businesses
can sell
What happens if the unemployment
rate falls? UK Interest rate 2014 - 2022

55. Constantly changing business environment due
to: #3 Legislation
• There are lots of laws that will
impact a business, and they fall
into four main groups:
1. Employment laws (Such as
minimum wage)
2. Recruitment laws (Such as The
Equality Act)
3. Consumer laws (Goods must be
satisfactory quality, fit for
purpose and as described)
4. Health and safety laws
Which law is this breaking?

56. Suggested activity
Research (in teams or pairs) to find the answers to these questions
1. What is the current minimum wage for someone who is 18?
2. What is the National Living Wage?
3. What is the rate of inflation in the UK today?
4. What is the current UK unemployment rate?
Extension: Find out about the consumer
rights act and feedback to your group –
how might it impact business

57. Constantly changing business environment due to:
#4 Environmental expectations
• From Toyota’s Prius and Nissan’s Leaf to Tesla’s Model S, car
manufacturers are competing to produce ever more fuel efficient,
environmentally friendly models. Some cars are now a mixture of
petrol (or diesel) and electric engines called hybrids.

58. Plenary Quiz
Answer yes or no to the following questions:
1. A want is the same as a need
2. A product is the same as a service
3. Factors of production include enterprise
4. Changes in technology will not have an impact on business
5. In the primary sector goods are manufactured
6. A social enterprise aims to help people or the planet

59. Plenary Quiz Answers
1. A want is the same as a need NO
2. A product is the same as a service NO
3. Factors of production include enterprise YES
4. Changes in technology will not have an impact on business NO
5. In the primary sector goods are manufactured NO
6. A social enterprise aims to help people or the planet YES

61. Sample question 1

62. Answer question 1

63. Sample Question 2

64. Answer question 2

65. Sample Question 3

66. Answer question 3
• Answer is C fruit farm

67. Sample Question 4

68. Answer question 4

69. Sample Question 5

70. Answer question 5
• Answer is C public limited company