1.1 What is a business?

Learning objectives

• Define a business and distinguish between goods and services, customers and consumers, and needs and wants.

• Describe the factors of production and how a business transforms inputs into outputs.

• Explain the role of the four business functions and how they depend on each other.

• Calculate added value and explain how businesses add value.

• Distinguish between the primary, secondary, tertiary and quaternary sectors and describe a chain of production.

• Explain the causes and consequences of sectoral change for businesses, workers and countries.

• Distinguish between entrepreneurs, intrapreneurs and social entrepreneurs, and explain why people start businesses.

• Explain the steps in starting a business and analyse the challenges and opportunities that start-ups face.

Introduction

Every day people buy food, travel, use their phones, see doctors and stream music. Each of these products is supplied by an organisation that has brought together people, materials, equipment and ideas to meet a demand. Business management studies how these organisations are set up, how they make decisions and how they respond to the world around them, starting with the most basic question of what a business is and what it does.

Four key concepts run through the whole course and give a way of looking at any business decision. Each one appears in the first steps of a business, as the table shows.

What a business is

A business is any organisation that uses resources to provide goods or services to other people. A family-run food stall in Bangkok, a cooperative of coffee farmers in Ethiopia, a hospital, a software company with 10,000 employees and a charity shop are all businesses in this sense. They differ in size, ownership and aims, but each one turns resources into something that other people value.

Most businesses aim to make a profit, which is the amount by which revenue from sales is greater than costs. Some have other main aims, such as providing a public service or solving a social problem, but they still need enough income to cover their costs. A business that runs out of money cannot continue, whatever its aims.

Goods and services

The outputs of a business are either goods or services. Goods are physical products that can be touched, stored and transported, such as a bicycle, a bag of rice or a laptop. Services are intangible: the customer receives an activity or an experience, such as a haircut, a bus journey, a bank account or a lesson.

Services have features that make them harder to manage than goods. They are usually produced and consumed at the same time, so they cannot be stored: an empty seat on a flight that has taken off is lost for ever. They depend heavily on the people who deliver them, so their quality varies from one occasion to the next. And because they are intangible, customers often judge them by what they can see, such as the condition of a hotel lobby or the friendliness of the staff.

Many products combine the two. A restaurant meal is a good (the food) served with a service (cooking, serving, the setting). A new car is sold with a warranty and servicing. Businesses often add services to goods because services are harder for competitors to copy than the product itself.

Customers and consumers

The customer is the person or organisation that buys the product. The consumer is the person who uses it. Often they are the same person, as when a student buys and drinks a bottle of water. In many markets they are different: parents buy toys that children use, a company buys laptops that its employees use, and a pet owner buys food that a cat eats.

The distinction matters because the two groups may want different things. A child wants a toy that is exciting; a parent also wants it to be safe, durable and good value. Successful businesses design and promote their products for both: toy makers advertise to children through characters and colours, and reassure parents with safety standards and educational claims.

Needs and wants

People buy products to satisfy needs and wants. Needs are the basic requirements for survival: food, water, shelter, clothing and, in modern societies, healthcare and education. Wants are desires for things that are not essential but improve the quality of life, such as a holiday, a branded pair of trainers or the latest smartphone.

Needs are limited, but wants are almost unlimited: once one want is satisfied, people usually find another. Businesses therefore compete mostly to meet wants, and many turn needs into wants through branding. Everyone needs water, but a customer who buys a particular brand of bottled water is satisfying a want for convenience, taste or image.

Inputs, processes and outputs

To produce anything, a business needs resources. Economists group these resources into four factors of production: land, labour, capital and enterprise. A business combines them to make goods or provide services.

Capital in this sense means physical equipment, sometimes called capital goods. In everyday speech and in finance, "capital" also means money invested in a business. The context shows which meaning is intended. Enterprise is the factor that brings the others together: without someone willing to take the risk of organising land, labour and capital, nothing is produced.

The resources a business uses are its inputs. These include the four factors of production and also bought-in materials and services, such as flour, packaging and electricity. The business transforms its inputs into outputs: the goods and services it sells. This transformation is the core activity of every business, whether it is a farm turning seeds, soil and labour into crops or a bank turning savers' deposits, staff and software into loans and payment services.

The diagram shows production as a cycle. Customers pay for the outputs, and that revenue pays for the next set of inputs. Customers also give feedback, through what they buy, what they complain about and what they review online, and this tells the business what to change. A business whose outputs no longer meet customers' needs and wants loses revenue and cannot buy the inputs it needs to continue.

The four business functions

Inside the transformation process, the work of a business is divided into four business functions, also called functional areas. In a small business one person may do all four; in a large company each is a separate department with its own managers.

Human resources

Human resource management (HRM) looks after the people in the business. It plans how many workers the business needs and with what skills, recruits and selects them, trains them, decides how they are paid and motivated, and deals with dismissals and redundancies. Its aim is to have the right people in the right jobs at the right time.

Finance and accounts

The finance and accounts function manages the money in the business. It raises finance for investment, controls spending through budgets, makes sure there is enough cash to pay bills on time, and records every transaction so that managers, owners and the tax authorities know how well the business is doing. It prepares the final accounts that show profit and the value of what the business owns.

Marketing

Marketing identifies what customers want and makes sure the business provides it profitably. It researches the market, decides which customers to target, and sets the product, price, promotion and place (distribution) of what the business sells. It is the link between the business and its customers.

Operations

Operations management, sometimes called production, turns inputs into outputs. It decides how products are made or services are delivered, where, in what quantity and to what standard of quality. It manages suppliers and stock and looks for ways to produce more efficiently and with less waste.

How the functions depend on each other

The four functions are interdependent: a decision in one affects all the others. Suppose a mobile phone repair business decides to offer a same-day repair service. Marketing must research whether customers will pay more for speed and then promote the service. Operations must hold more spare parts and organise the workshop to repair phones faster. Human resources must recruit or train more technicians and may need to change shift patterns. Finance must find the money for extra stock and staff and check that the higher price covers the higher costs.

A plan can fail if any one function does not play its part. A brilliant advertising campaign is wasted if operations cannot deliver the product, and a well-made product will not sell if marketing has misjudged the price. Managers in large businesses therefore spend much of their time coordinating between departments.

Added value

Customers pay a business more than the cost of the materials it buys in because the business has done something to them that customers value. A café sells a cup of coffee for much more than the cost of the beans, milk and cup. The difference is the added value that the café has created by roasting and grinding the beans, preparing the drink with skilled staff and equipment, and serving it in a comfortable place at a convenient time.

The diagram shows a cup of coffee sold for $4.50 (hypothetical data). Beans, milk, the cup and energy bought from suppliers cost $1.20, so the café adds $3.30 of value. That $3.30 has to pay the baristas, the rent on the shop and the cost of the coffee machine before any profit is left.

How businesses add value

A business can increase its added value either by charging a higher price for its output or by reducing the cost of its bought-in inputs. Both depend on making the product more valuable to customers, or producing it more efficiently, than competitors do.

• Branding. A strong brand lets a business charge more for a similar product, because customers trust it or want to be associated with it.

• Quality and design. Better materials, more careful production or a more attractive design raise what customers will pay. Dyson, founded in the United Kingdom, charges premium prices for vacuum cleaners and hair dryers whose design and patented technology customers see as better than rivals'.

• Convenience. Customers pay more for products delivered quickly, close to home or at any hour: a bottle of water costs more at a railway station than in a supermarket.

• Customer service. Expert advice, after-sales support and easy returns add value, especially for expensive products.

• A unique selling point. A feature that no competitor offers, such as an organic or Fairtrade certification, lets the business stand out.

• Efficient production. Buying materials more cheaply, cutting waste or using less energy reduces the cost of inputs and so raises added value at the same price.

Added value is also the source of the money that pays employees, rewards owners and funds investment. A business that adds little value, such as a shop selling unbranded goods at the same price as every other shop, has little room to pay good wages or to invest.

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Sectors of economic activity

Business activity is grouped into four sectors according to what the business does with resources. Every business can be placed in at least one of them.

The secondary sector adds value to primary products by processing them. It includes manufacturing, from food processing to electronics, and construction. The tertiary sector, also called the service sector, is the largest sector in high-income economies, where most people work in shops, offices, hospitals, schools, transport and hotels.

The quaternary sector was once counted as part of the tertiary sector, and some statistics still combine them. It is separated because knowledge-based activities have become so important: Indian IT service companies such as Infosys and Tata Consultancy Services employ hundreds of thousands of software engineers who write and maintain systems for clients around the world. These activities depend on highly educated workers and on technology rather than on natural resources or factories.

The chain of production

The sectors are linked. A product usually passes through several businesses in different sectors before it reaches the consumer, and each business adds value. This sequence is the chain of production.

In the chain for chocolate, farmers in West Africa grow and harvest cocoa beans, which are fermented, dried and sold. A chocolate maker roasts and grinds the beans, adds sugar and milk, and moulds the bars. Wholesalers, transport firms and retailers move the bars to shops and sell them. Quaternary businesses support the chain throughout: plant scientists breed disease-resistant cocoa, food scientists develop recipes, and market research firms tell chocolate makers which flavours consumers will buy.

Most of the final price is added late in the chain, by manufacturing, branding and retailing. This explains why countries that only export raw materials earn a small share of the value of the products made from them, and why many of them try to process their own raw materials. Côte d'Ivoire and Ghana, the two largest cocoa producers, have both encouraged local grinding and chocolate making for this reason.

Some businesses operate in more than one sector. A tea company that owns plantations, processes and packs the tea and sells it in its own shops covers the primary, secondary and tertiary sectors. Controlling several stages of the chain in this way is called vertical integration.

Sectoral change

The share of a country's output and employment in each sector changes over time. This shift is sectoral change, sometimes called structural change. As economies develop, the main source of jobs and income usually moves from the primary sector to the secondary sector, then to the tertiary sector, and more recently towards the quaternary sector.

In a low-income economy most people work in agriculture, often on small family farms. As industry develops, people move to towns to work in factories, and the secondary sector grows; this is industrialisation. As incomes rise further, people spend more of their income on services, so the tertiary sector grows and becomes the largest employer. In the most advanced economies the share of manufacturing in employment then falls, a process called deindustrialisation.

The chart shows the pattern across five countries in 2024. Ethiopia, a low-income economy, has 61.0% of its workers in agriculture. India is in transition, with 42.4% still in agriculture but large and growing industrial and service sectors. China's industrial share (31.6%) is the highest of the five. South Korea and the United Kingdom, high-income economies, have very small agricultural sectors and most workers in services.

Sectoral change in China

China shows how fast sectoral change can happen. In 1991 agriculture employed 59.6% of China's workers, industry 21.4% and services 18.9%. Over three decades hundreds of millions of people moved from farms to factories and offices. By 2024 agriculture's share had fallen to 22.2%, industry's had risen to 31.6% and services had grown to 46.2%, the largest of the three. Services overtook agriculture as the largest employer in 2011.

High-income economies have gone further. In the United Kingdom, industry's share of employment fell from 30.8% in 1991 to 16.1% in 2024 and services' share rose from 66.8% to 83.0%. In South Korea, which industrialised later, industry's share fell from 37.2% to 23.7% over the same period.

Sources: ILO modelled estimates, World Bank World Development Indicators (SL.AGR.EMPL.ZS, SL.IND.EMPL.ZS, SL.SRV.EMPL.ZS), accessed October 2026.

Causes of sectoral change

• Rising productivity in agriculture. Machinery, fertilisers and better seeds let fewer farmers feed more people, so workers leave the land for better-paid jobs in towns.

• Rising incomes. As people become richer they spend a smaller share of their income on food and basic goods and a larger share on services such as holidays, restaurants, healthcare, education and entertainment.

• Rising productivity in manufacturing. Automation and robots let factories produce more with fewer workers, so manufacturing employment falls even when output rises.

• Globalisation and offshoring. Businesses in high-wage countries move production to countries with lower costs, so manufacturing jobs move from, for example, the UK and the USA to China, Vietnam and Mexico. This is offshoring.

• Technology and education. Digital technology creates new knowledge-based industries, and a more educated workforce allows countries to specialise in quaternary activities such as software, design and research.

• Government policy. Governments may encourage manufacturing through industrial policy, or close loss-making state industries, as the UK did with most coal mines in the 1980s and 1990s.

Consequences of sectoral change

Sectoral change brings opportunities and threats. Who gains and who loses depends on the skills of workers, the location of industries and how quickly people and businesses can adapt.

For a business, sectoral change is a clear example of change in its environment. A business that relies on demand from a declining industry, such as a supplier of parts to coal mines, must find new markets or close. A business that understands the shift early can grow with it: many engineering firms in former industrial regions now make components for renewable energy, which uses the same skills in a growing market.

Entrepreneurship

Every business begins with someone who has an idea and is willing to take the risk of turning it into a product. This person is an entrepreneur, and the activity is entrepreneurship, which is also called enterprise, the fourth factor of production.

Entrepreneurs bring two things to a business. The first is the idea: they see an opportunity, such as an unmet need, a better way of doing something or a gap in the market. The second is the willingness to bear risk: they invest their own money, time and reputation before they know whether the business will succeed. If it fails, they may lose everything they put in; if it succeeds, they keep the profit.

Characteristics and skills of entrepreneurs

There is no single type of entrepreneur, but successful founders tend to share several qualities. Some are personal traits; others are skills that can be learned.

Why people start businesses

• The profit motive. Owners keep the profit a successful business makes, which can be far more than they would earn as employees.

• Independence. Many people want to be their own boss, make their own decisions and control their working hours.

• A business idea. A person who has invented a product or spotted an opportunity may only be able to develop it by setting up a business.

• Unemployment. People who lose their jobs, or cannot find one, may become self-employed, often in a trade they already know.

• Flexibility. Running a business can be combined with caring for a family or with another job, especially when it is run from home or online.

• Personal satisfaction. Building something of one's own, or turning a hobby into a career, motivates many founders as much as money does.

• To meet a social need. Some people start businesses mainly to solve a social or environmental problem rather than to make a profit for themselves.

People in the last group are social entrepreneurs. They use business methods, trading goods and services, to achieve a social aim, and they reinvest most of any profit in that aim. The best-known example is Muhammad Yunus, who founded Grameen Bank in Bangladesh in 1983 to lend small sums to poor women who could not borrow from ordinary banks. Yunus and the bank were jointly awarded the Nobel Peace Prize in 2006.

The risks entrepreneurs take

Starting a business involves several kinds of risk, and the entrepreneur bears most of them personally.

• Financial risk. Founders often invest their savings and borrow, sometimes using their home as security. If the business is not a separate legal entity, they are personally responsible for all its debts.

• Career risk. Leaving a secure job means giving up a regular salary, a pension and career progress; returning to employment after a failed business can be difficult.

• Personal risk. Long hours, stress and uncertainty can damage health and relationships.

• Reputational risk. A failed business can make it harder to borrow or to win the trust of investors in the future, although in some cultures failure is accepted as part of learning.

The legal form a founder chooses affects the size of the financial risk. A sole trader is personally liable for every debt of the business, while the owners of a company risk only the money they have invested. This difference between unlimited liability and limited liability is one of the main reasons why businesses become companies as they grow.

Intrapreneurship

Entrepreneurial thinking also happens inside existing organisations. An intrapreneur is an employee who behaves like an entrepreneur within the business: developing a new product, process or venture using the company's resources. The difference is that the business, not the individual, bears the financial risk and owns the result.

A well-known example is the Post-it Note at 3M. A 3M scientist, Spencer Silver, developed a weak, reusable adhesive in 1968 that seemed to have no use. Years later a colleague, Art Fry, used it to make bookmarks that stayed in his hymn book without damaging the pages, and pushed the idea through the company until Post-it Notes were launched in 1980. Google's email service, Gmail, launched in 2004, also began as a project by one engineer, Paul Buchheit, inside the company.

Businesses encourage intrapreneurship because new ideas from staff help them stay competitive and show creativity in a changing market, and because talented employees who are allowed to pursue their ideas are less likely to leave and start rival businesses. Some give employees time for their own projects or run internal competitions for new ideas.

Starting a business

A new business is often called a start-up, especially when it is young and still searching for a product and a group of customers that will make it viable. Founders follow broadly similar steps, although not always in the same order.

1. Generate and test an idea. The idea may come from a personal problem, a hobby, a skill, or a gap noticed in the market. Founders test it by talking to possible customers or making a simple version.

2. Research the market. Market research estimates how many customers there are, what they will pay and who the competitors are. A STEEPLE analysis helps to identify the external factors that could affect the business.

3. Write a business plan. A business plan sets out the idea, the target market, the marketing and operations plans, the people involved and financial forecasts. Banks and investors usually want to see one before they lend or invest.

4. Raise finance. Start-ups need money for equipment, stock, premises and to cover costs until sales cover them. Common sources are the founder's personal funds, family and friends, bank loans, business angels, crowdfunding and government grants.

5. Choose a legal form and register. The founder decides whether to trade as a sole trader, a partnership or a company, registers the business with the authorities and obtains any licences, tax numbers and insurance.

6. Find a location. This may be a shop, an office, a market stall, a workshop, a home or an online store.

7. Recruit staff and find suppliers. Even a one-person business needs suppliers; most need at least a few employees.

8. Launch, review and adapt. After launch, the founder studies sales and customer feedback and changes the product, price or plan where needed.

Challenges in starting a business

Starting a business is risky, and new businesses face problems that established businesses have already solved.

Lack of finance

Banks are reluctant to lend to businesses with no trading record and few assets to offer as security, so many founders cannot raise enough money. They may start with too little capital and run out before the business becomes profitable.

Cash flow problems

Even a business with good sales can run short of cash. Start-ups usually pay for equipment and stock before they receive any revenue, suppliers often want payment at once from a new customer, and business customers may take 30 to 90 days to pay. A business that cannot pay its bills when they are due can be forced to close.

Lack of experience and skills

A founder may be an excellent chef or programmer but have no experience of managing staff, keeping accounts, marketing or dealing with tax. Mistakes in these areas are common and costly.

Competition

New businesses usually compete against established firms that have loyal customers, well-known brands and lower costs because they produce on a larger scale. A start-up must offer something different, such as better service, a new product or a lower price, to win customers.

Building a customer base

Customers know nothing about a new business and may not trust it. It takes time and money to build awareness and loyalty, and revenue in the first months is often low.

Legal requirements and bureaucracy

Registering a business, obtaining licences, meeting health and safety rules, employing staff legally and paying taxes all take time and knowledge. In some countries the process is quick and online; in others it involves many separate offices and long delays.

Location costs

Good locations, with many passing customers, are expensive. A start-up may have to choose between high rent in a busy street and a cheaper site that few customers see.

Marketing

Start-ups have small promotion budgets and must find low-cost ways to reach customers, such as social media, word of mouth and local events. Choosing the wrong price or the wrong target market can cause a start-up to fail before the founder has had time to correct the mistake.

Opportunities for start-ups

The same environment that creates challenges also creates opportunities, and in many ways starting a business has become easier.

• Unmet needs. Changes in society, technology and tastes constantly create needs that existing businesses do not meet, from plant-based foods to care services for an ageing population.

• Technology lowers entry costs. Cloud software, smartphones and online payment systems let a founder run accounts, design, marketing and sales from a laptop, without expensive equipment or offices.

• E-commerce. Online marketplaces and website builders, such as Etsy, Amazon Marketplace and Shopify, let a small business sell to customers across a country or the world without a shop. Selling online is e-commerce.

• Government support. Many governments offer start-up loans, grants, tax relief, training and business advice, because new businesses create jobs and competition. The UK's government-backed Start Up Loans scheme, for example, lends to new businesses and offers founders mentoring.

• The gig and platform economy. Platforms for ride-hailing, food delivery, freelance design and holiday rentals let individuals earn income as self-employed workers with very little start-up capital, and some go on to build larger businesses.

• Niche markets. A small business can serve a small, specialised group of customers that large firms ignore because it is too small for them.

Why many start-ups fail early

A large share of new businesses close within a few years. In the United States, the Bureau of Labor Statistics tracks every new private sector establishment. Of those that opened in the year to March 2013, 79.6% were still operating one year later, about half (50.6%) after five years and 30.4% after twelve years.

Most failures come from a few linked causes. The most common is running out of cash: the business cannot pay its suppliers, staff or lenders on time, even if it is selling well and would be profitable in the long run. Poor planning is often behind this, such as underestimating start-up costs, overestimating early sales, or not allowing for customers who pay late. Other causes are a product that too few customers want, a weak location, strong competition and the founder's lack of management experience.

Careful planning reduces the risk. A business plan with realistic sales forecasts, a cash flow forecast, an emergency fund and a clear understanding of competitors does not guarantee success, but it helps the founder to spot problems before they become fatal and to persuade lenders to help.

Case study: Canva

Canva is an online graphic design platform based in Sydney, Australia, that lets people with no design training create presentations, social media posts, posters and documents in a web browser. It shows how an entrepreneur turns an idea into a business, the challenges of raising finance for a start-up, and the opportunities that cloud technology creates.

The idea came from Melanie Perkins's experience as a university student in Perth, where she taught design software to other students and found it slow and difficult to learn. With her partner Cliff Obrecht she first tested a narrower version of the idea: Fusion Books, a web-based tool that let secondary schools design their own yearbooks, launched in 2011. At its peak it published yearbooks for 400 high schools. The small business proved that non-designers would use simple online design software, and it gave the founders experience and a modest income.

Raising finance for the larger idea was the main challenge. Perkins and Obrecht spent long periods pitching to investors, including in Silicon Valley, and heard more than 100 rejections. Investors were unsure about founders with no record in technology, based far from the main technology centres, with an idea that competed with established software companies. The founders strengthened their plan by recruiting Cameron Adams, a former Google engineer based in Sydney, as the third co-founder. The Australian venture capital firm Blackbird led the seed round, which was matched by an Australian government grant, and Canva launched in 2013.

The table shows growth that very few start-ups achieve. Several features of the business explain it. Canva meets a real and widespread need: most people and small organisations must produce visual material but cannot afford a designer or expensive software. It uses cloud technology, so customers need only a browser, and the cost of serving one more user is low. It is free to use, with paid subscriptions for extra features; the free version attracts users and some of them later pay. This combination let Canva reach profit in 2017, early for a technology company, and it has reported positive free cash flow every year since.

The case illustrates several characteristics of entrepreneurs: creativity in seeing that design could be made simple, resilience in the face of repeated rejection, and the willingness to bear risk. It also shows how founders reduce risk by testing an idea on a small scale first. Fusion Books cost far less than Canva, and its success gave evidence to investors that the larger plan could work.

Canva's success also has limits as evidence. Most start-ups that are rejected by more than 100 investors do not succeed, and studying only the famous successes gives a misleading picture of the risks. Canva is privately held, so many of its figures come from the company or from investors rather than from audited published accounts. Its environment keeps changing too: in August 2026 the company cut its expected revenue growth rate from 30% to 20% because the cost of providing new artificial intelligence features was higher than expected. The company responded by moving more of the work onto its own artificial intelligence models to lower the cost of each task.

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• Explain two characteristics of an entrepreneur shown by Canva's founders.

• Explain why investors were reluctant to finance Canva before 2013, and how the founders reduced the risk for them.

• Explain how technology created opportunities for Canva as a start-up.

Sources: Fortune, “Melanie Perkins and Canva”, 4 October 2022; TechCrunch, 8 January 2018 and 18 February 2026; Reuters, 20 August 2025; Fortune, 12 August 2026.

Exam practice

Questions on what a business is appear mostly as short questions in Section A of Papers 1 and 2: definitions, "describe", "explain" and "distinguish" questions, and short calculations of added value. Its ideas also appear inside extended responses, for example when a question asks about the challenges facing a new business, or how a business should respond to change in its sector.

Added value calculations are short, but every step should be shown, with the currency in the answer.

Questions on sectoral change usually ask for causes or consequences. Each reason needs a cause and its effect on employment in the sector.

Summary

• A business uses resources (land, labour, capital and enterprise) to produce goods and services that meet customers' needs and wants.

• The customer buys a product; the consumer uses it. Needs are essential for survival; wants are desires that improve the quality of life.

• The four business functions, human resources, finance and accounts, marketing and operations, are interdependent: a decision in one affects the others.

• Added value is the price of the output minus the cost of bought-in inputs; it is not the same as profit.

• Business activity falls into the primary, secondary, tertiary and quaternary sectors, linked by the chain of production.

• Sectoral change shifts employment from agriculture to industry to services and knowledge work as economies develop, bringing gains and losses for businesses, workers and regions.

• Entrepreneurs set up businesses and bear the risk; intrapreneurs develop new ideas inside organisations; social entrepreneurs trade to meet a social aim.

• Start-ups face challenges of finance, cash flow, experience, competition and regulation, and opportunities from unmet needs, technology, e-commerce and government support.

Self-check

• To do:

  I can define a business and distinguish between goods and services, customers and consumers, and needs and wants.

• To do:

  I can describe the four factors of production and the transformation of inputs into outputs.

• To do:

  I can explain the role of each business function and how a decision in one affects the others.

• To do:

  I can calculate added value and explain three ways a business can increase it.

• To do:

  I can classify businesses into the four sectors and draw a chain of production.

• To do:

  I can explain the causes and consequences of sectoral change, using data for a real country.

• To do:

  I can distinguish between an entrepreneur, an intrapreneur and a social entrepreneur.

• To do:

  I can explain the steps in starting a business and the main challenges and opportunities for start-ups.