1.1 Business Activity Flashcards
Why do businesses exist?
To satisfy the needs and wants of customers and, in return, make a profit.
What is enterprise?
Taking a risk to set up/expand on a new business venture.
State three characteristics of an entrepreneur.
Creative, risk taker, determined, confident (to name a few).
State the 4 potential rewards for risk taking.
Financial - making a lot of money (profit).
Independence - be your own boss.
Self-satisfaction - sense of achievement from succeeding.
Changing customer habits - e.g. customers becoming more environmentally friendly or healthy.
State 4 potential drawbacks from risk taking.
Financial - loss of money, debt.
Health - stress or physical.
Strained relationships - not enough time to spend with family.
What is an entrepreneur.
A person who takes the risk of starting and running a business enterprise.
What does it mean to spot an opportunity?
The ability to see the need for a particular product or service that customers need (a gap in the market).
Do all businesses exist to make profit?
No - charities, social enterprises and public sector organisation don’t.
What is the difference between invention and innovation?
Invention is creating something brand new that did not exist before, whereas innovation is taking something that already exists and adapting it to make it better/different.
What is a good?
A tangible/physical item.
What is a service?
An intangible item. This is generally when someone does something for you e.g, a taxi, a bank.
