1.1 Flashcards
Three reasons why business ideas come about
Changes in technology,
changes in consumer preferences
a product becomes obsolete
Two ways in which new businesses ideas come about ?
- adapt existing product
-Create a completely original product
What is risk?
The probability of something negative occurring
How can a business minimise risk?
Market research, raise enough finance and business plan
What is reward?
Something given/gained for your efforts
What are risks of business activity?
Business failure, financial loss and lack of security
What are the reasons for business failure?
Poor market research, cost to high, poor quality, lower sales expected
What is an enterprise?
Another word for business
What is an entrepreneur?
Somebody who takes a calculated risk through starting a business
What is adding value?
The difference in price of the finished product/service and the cost of production
What are purposes of business activity?
To produce goods and services,to meet customer needs, and to add value
What are methods to add value?
Build a strong brand, unique selling point and high quality
What are the roles of an entrepreneur?
Take risks, organise resources and make business decisions
What is a consumer?
A person who buys a product or uses a service in the public and private sector
What are the benefits of a strong brand?
-Add value because it can help a business to generate customer loyalty
-Differentiates its product
-It allows companies to charge higher prices
