AQA AS-Level Business: What Is Business? (7137)

This guide covers 3.1.1 Business and objectives and 3.1.2 Forms of business and stakeholders, the first two sub-topics of Unit 3.1 (What is business? Managing marketing and finance) in AQA AS Business (7137), for first teaching from September 2026. AQA runs AS as a separate, stand-alone qualification that shares a single specification document with A-level Business (7138) – 3.1.1 and 3.1.2 are examined on both AS Paper 1 (which covers the whole of Unit 3.1) and, as background content, on AS Paper 2 (which focuses on Unit 3.2 but is explicitly scoped by AQA to also draw on 3.1.1 and 3.1.2).

This guide does not cover the remainder of Unit 3.1 – 3.1.3 Marketing management and 3.1.4 Financial management – nor Unit 3.2 (3.2.1 People management and 3.2.2 Operations management), the unit AS Paper 2 focuses on. None of those four sub-topics is yet published on this site as a dedicated AS resource.

Where this fits in 7137

As the opening sub-topics of the AS course, Business and Objectives and Forms of Business and Stakeholders introduce why businesses are started, the legal structures they can take, and who has a stake in them – concepts that Unit 3.2 (Managing people and operations) and the rest of Unit 3.1 build on directly.

Syllabus coverage

AQA AS BUSINESS (7137) — UNIT 3.1, SUB-TOPICS 3.1.1-3.1.2

• 3.1.1 Business and objectives
  • Entrepreneurs: reasons for setting up in business (financial and non-financial); characteristics of entrepreneurs (risk taker, resilient, focused, passionate, innovative, adaptable); challenges of setting up in business; how an entrepreneur’s role changes as the business grows
  • Business planning and decisions: the purpose and value of a business plan; the meaning and importance of competitiveness; influences on business decisions (objectives, risk, reward, resources, market conditions, ethics, opportunity costs); the importance of risk and reward in decision making; ethical dilemmas in decision making, including profit versus ethics
  • Business objectives: the purpose and value of setting business objectives; the characteristics of effective objectives – SMART (Specific, Measurable, Accountable, Realistic, Time specific)
• 3.1.2 Forms of business and stakeholders
  • Different forms of business: sole traders; private limited companies (Ltd); public limited companies (plc); co-operatives (worker, consumer and producer); social enterprises
  • Issues to consider when comparing forms of business: control; objectives; sources of finance; distribution of profits; unlimited and limited liability; reasons to buy shares; influences on share price and the significance of share price changes
  • Calculate, interpret and analyse: market capitalisation; dividends per share; dividend yield
  • Stakeholders: internal (employees, owners/shareholders) and external (customers, suppliers, other creditors, community, government); the impact of business activity on stakeholders; ethical responsibilities to stakeholders

How to approach it

Because AS Business is examined as a stand-alone qualification with its own assessment, do not assume this content matters less than the equivalent material studied at full A-level – AS candidates are examined on exactly this sub-topic set on Paper 1, and its concepts recur throughout the rest of the AS course.

Start with entrepreneurs and business planning (3.1.1): the specification asks you to explain the reasons for setting up in business, financial and non-financial: financial ones such as profit and income, and non-financial ones such as independence, control, turning a passion into a career and filling a gap the entrepreneur has noticed, and to link named entrepreneurial characteristics – risk-taking, resilience, focus, passion, innovation, adaptability – to how they help someone navigate the real challenges of setting up a business (funding, competition, uncertainty). Questions frequently ask you to weigh up a business decision using the named influences – objectives, risk, reward, resources, market conditions, ethics and opportunity cost – for a specific scenario, rather than listing the influences in the abstract. Practise stating a business objective using the SMART framework the specification now names directly (Specific, Measurable, Accountable, Realistic, Time specific): a business that says it wants to “grow” has stated a growth objective only in general terms, while one that says it wants to “increase market share by 5% within two years” has stated the same objective specifically enough to judge success against.

For forms of business and stakeholders (3.1.2), revise by comparing structures directly against each other on control, access to finance, and liability, rather than learning each form’s definition in isolation: a sole trader has unlimited liability and full control but limited access to finance; a private limited company has limited liability and more access to finance, at the cost of some control and a share of distributed profits going to other owners. This comparative approach matches how exam questions typically ask you to recommend or evaluate a form of business for a specific scenario. For companies, be ready to calculate and interpret market capitalisation (number of issued shares × current share price), dividend per share (total dividend paid ÷ number of ordinary shares in issue), and dividend yield (dividend per share ÷ share price, × 100) – and to explain influences on share price, such as trading performance, market sentiment and the wider economy. Finally, be ready to distinguish internal stakeholders (employees, owners/shareholders) from external stakeholders (customers, suppliers, other creditors, the community, government), and to explain how business activity affects them and what ethical responsibilities a business has toward them.

Worked example: dividend yield

A public limited company has 2,000,000 ordinary shares in issue, trading at 150 pence each. It pays a total dividend of £160,000 for the year.

Dividend per share:  £160,000 / 2,000,000 shares = 8 pence
Dividend yield:       (8p / 150p) x 100 = 5.33% (2 d.p.)
Market capitalisation: 2,000,000 shares x 150p = £3,000,000

This shows how the three formulae the specification names for 3.1.2 – dividend per share, dividend yield and market capitalisation – combine figures a shareholder would actually be given (share price, shares in issue, total dividend) into the measures they use to judge a company as an investment.

Common mistakes

Listing entrepreneurial characteristics or influences on business decisions without applying them to the specific scenario in the question – exam questions ask you to explain how a named factor affects a named business, not to recite a list. Confusing dividend per share (an absolute amount, in pence) with dividend yield (a percentage relative to share price). Describing a business form’s features without comparing it to the alternatives on control, finance and liability – the dimensions exam questions typically ask about. Assuming AS content is less rigorously examined than the equivalent A-level topic, when AS Business is assessed as its own complete qualification.

Quick revision checklist

• Explain financial and non-financial reasons for starting a business, and link named entrepreneurial characteristics to the real challenges of setting one up.
• Apply the named influences on business decisions (objectives, risk, reward, resources, market conditions, ethics, opportunity cost) to a specific scenario, and state an objective using the SMART framework.
• Compare forms of business on control, access to finance and liability – not as isolated definitions – including co-operatives and social enterprises alongside sole traders, Ltds and plcs.
• Calculate market capitalisation, dividend per share and dividend yield, and distinguish internal from external stakeholders.
• Remember that AS Business (7137) is a stand-alone qualification with its own full assessment on this content.

Official syllabus

AQA AS and A-level Business (7137, 7138) specification PDF, Version 1.1 (November 2025), subject content section 3.1.1-3.1.2 (pp.12-14) – aqa.org.uk, verified 2026-09-17.