A Level Business: Enterprise (Cambridge 9609) – Revision Notes

These are condensed notes for section 1.1 Enterprise of the Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028 (1.1.1 to 1.1.3, an AS Level topic). For full explanations and worked examples, use the study guide. Then test yourself with the practice questions. Wider Topic 1 recall is in the Topic 1 revision notes. Course links: the Cambridge A Level Business hub, the checklist and the free diagnostics.

1.1.1 Nature of business activity

Key definitions

Term	Meaning
Purpose of business activity	Using resources to produce goods and services that meet customer wants and the owners’ aims
Land	Natural resources, including the site
Labour	Human effort, physical and mental
Capital	Man-made resources used in production, and the money used to buy them
Enterprise	The ability to seek out and successfully develop business opportunities (the syllabus wording)
Adding value	Selling output for more than the cost of the bought-in inputs
Opportunity cost	The value of the next best alternative given up
Problem of choice	Resources are limited and wants are not, so using resources one way means not using them another way

Formula to know

Value added = selling price − cost of bought-in materials and services. It is a standard form. It is not profit, because wages and overheads come out of it.

Reminders

• To add value: branding, design, quality, service, convenience, speed.
• Value added per unit × units sold = total value added. Check that volume is unlikely to fall when price rises before claiming a gain.
• Opportunity cost is the single best alternative given up, not a list of everything given up.
• The dynamic environment: tastes, technology, rivals, prices and the economy keep changing. Change creates both opportunities (new enterprises) and threats.

Success and failure

Tends to cause success	Tends to cause failure
A real customer need	Weak planning
Good cash and cost control	Too little finance or poor cash control
Effective management	Costs above revenue
Clear difference from rivals	Strong competition
Adapting to change	Failing to respond to change

Link the cause to the case facts. “Poor cash flow” earns little; “monthly costs of £8,000 against £5,500 of sales revenue” shows application.

Scale of business

Type	Quick test
Local	One town or area
National	Across one country
International	Sells in more than one country
Multinational	Owns and runs operations in more than one country

Must-know distinction: international is about where it sells; multinational is about where it operates. (These are the standard distinctions; the syllabus lists the four types without defining them.)

1.1.2 Entrepreneurs and intrapreneurs

Compare the two

	Entrepreneur	Intrapreneur
Where	Creates a new business	Works inside an existing business
Risk	Usually bears the financial risk	Employer bears the financial risk
Role	Spots the opportunity, gathers resources, starts up	Drives new products, processes or ventures to keep the business successful
Reward	Profit and ownership	Pay, promotion, recognition, sometimes a share of the gain

Qualities (apply to the person in the case)

Creativity and opportunity recognition; calculated risk-taking; determination and resilience; leadership and communication; organisation and numeracy; flexibility.

Barriers to entrepreneurship

Finance; lack of skills or experience; regulation and the cost of complying; competition and entry costs; fear of failure; lack of an idea, information or networks.

Risk versus uncertainty

	Risk	Uncertainty
Outcomes	Known or estimable	Cannot be reliably predicted
Probability	Can be estimated, for example from past data	Cannot be put on it
Response	Research, insurance, spreading risk	Flexibility, contingency plans

These are the standard definitions, since the syllabus lists both terms without defining them.

Enterprise and a country’s development

Jobs and incomes, output and tax revenue, innovation, competition and choice. Evaluation: a high failure rate wastes resources, and some enterprise harms the environment or the community.

1.1.3 Business plans

Method in steps for a plan question:

1. State what a business plan is: a document setting out the intended business and how it will be achieved.
2. Give its purpose: clarify the idea, guide decisions, set targets, persuade lenders and investors.
3. Name the elements: idea and aims, target market, marketing, operations and staffing, legal structure and owners, financial information and forecasts.
4. Weigh benefits (thinking, spotting weaknesses early, raising finance, targets) against limitations (time, unreliable assumptions, goes out of date, no guarantee).
5. Give a judgement tied to the case: how risky is the venture, and how much finance is needed?

Small worked reminder: a forecast of 150 orders at £12 gives monthly sales revenue of £1,800. If orders prove 20% lower at 120, revenue is £1,440, which is £360 less. Test the sensitivity of the plan to the assumption.

Worked reminders

Value added. A leather wallet sells at £14.00. Bought-in leather costs £5.50 and packaging £0.50, so bought-in cost is £6.00 and value added is £14.00 − £6.00 = £8.00. For 2,000 wallets, total value added is £16,000. Show the subtraction before the total.

Opportunity cost. A florist can accept a wedding order worth £640 with £280 of materials, a net £360, or run an events stall worth £430 with £120 of materials, a net £310. If she takes the wedding, the opportunity cost is the £310 net she gives up. Take net figures where costs are given, and name only the next best option.

Scale and risk in context. A bakery selling in one town is local. If it ships across the country it is national. If it exports to three countries it is international. If it opens its own ovens in two of them it is multinational. Whenever a case shows a risk, ask whether the probabilities could be estimated; if not, call it uncertainty.

How to write the answer

Command word	What the answer needs
State, identify	A short point with no explanation
Define	The meaning, in your own words, precise enough to separate it from near terms
Calculate	Formula or working, then the answer with units
Explain	A point, then why or how, tied to the case
Analyse	A point, developed through a chain of reasons using case facts
Evaluate	Weigh both sides, then reach a reasoned judgement
Justify	Give a decision, then support it with reasons from the case

For case studies, quote at least one figure or fact in every developed paragraph. Short answers such as definitions gain from a brief example. In evaluation, state what the judgement depends on, for example the amount of finance needed, the owner’s experience or the time available.

Planning check. Before trusting a business plan, ask three things: where did the forecast numbers come from, what happens to revenue if sales fall short, and does the plan show how the start-up costs will be funded. A plan that answers all three is more convincing to a lender than one that only states hopes.

Quick self-test

1. Name the four factors of production.
2. A candle costs £2.30 of bought-in materials and sells for £9.80. State the value added per candle.
3. How much value is added if 500 candles are sold?
4. A trader can spend a day on market sales worth £210 or on wholesale deliveries worth £180. If she chooses the market, what is the opportunity cost?
5. Distinguish international from multinational.
6. State one difference between an entrepreneur and an intrapreneur.
7. Give two barriers to entrepreneurship.
8. Distinguish risk from uncertainty.
9. Give two purposes of a business plan.
10. Give two limitations of a business plan.
11. Why is value added not the same as profit?

Answers

1. Land, labour, capital and enterprise.
2. £9.80 − £2.30 = £7.50.
3. 500 × £7.50 = £3,750.
4. The £180 of wholesale deliveries given up.
5. International sells in more than one country; multinational owns and runs operations in more than one country.
6. An entrepreneur starts a new business, while an intrapreneur acts entrepreneurially within an existing business.
7. Any two, such as difficulty raising finance and lack of experience.
8. Risk has outcomes whose likelihood can be estimated; uncertainty has outcomes that cannot be reliably predicted.
9. Any two, such as clarifying the idea and persuading a lender.
10. Any two, such as unreliable assumptions and going out of date.
11. Wages, rent and other overheads must still be paid out of value added.

Where marks are usually lost

• Confusing value added with profit or with selling price.
• Naming the chosen option as the opportunity cost instead of the option given up.
• Defining risk and uncertainty identically.
• Treating an intrapreneur as a business founder.
• Listing qualities or barriers without applying them to the person in the case.
• Giving a one-sided answer to a question that asks you to evaluate or justify.
• Stating “poor planning” as a cause of failure without citing data from the case.
• Saying a business plan guarantees success or a loan.
• Using “international” and “multinational” interchangeably.

Frequently asked questions

What is the difference between an international and a multinational business? An international business sells in more than one country, often by exporting. A multinational owns and runs operations, such as factories or shops, in more than one country.

What is the difference between risk and uncertainty? Risk has outcomes whose likelihood can be estimated, for example from past data. Uncertainty has outcomes that cannot be reliably predicted, so no probability can be put on them.

Why is value added not the same as profit? Value added is the selling price minus the cost of bought-in materials and services. Wages, rent and other overheads must still be paid out of it, so profit is lower.

What are the barriers to entrepreneurship? Common barriers include difficulty raising finance, lack of skills or experience, regulation and the cost of complying, competition from established firms, and fear of failure.

Official syllabus

Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028, published by Cambridge University Press & Assessment (Cambridge Assessment International Education), section 1.1.