1.1 Enterprise Flashcards
Define business objectives
Measurable targets set by the business (like sales or profits) that have to be achieved within a given period of time
Define transformation process
Involves converting inputs into outputs
Define FOP
These are inputs into the transformation process (land, labor, capital, enterprise)
Define primary sector
It’s the first stage of production and includes extracting or growing resources like fishing, mining
Define adding value (first definition)
Occurs in the transformation process where the outputs produced are worth more than the inputs brought in to provide them
Define added value (second definition)
It’s the difference between the price of the product and the cost of the raw materials
2 ways in which a business can increase its added value
- Reduce COP
- reduce waste
- best price for supplies
- ensuring mistakes aren’t made - Increase the perceived benefits in customer’s eyes
Define brand
It’s the name, design, logo, or symbol that makes the product recognizable and easy to differentiate from competition in the customer’s eyes
Define market forces
Forces of demand and supply which determine the price of the product and the quantity demanded and supplied in the market
Define opportunity cost
Measures the sacrifice for choosing one option in terms of the next best alternative forgone
What 3 main impacts can external factors have on a business
- Demand for products
- Cost and availability of inputs
- Nature of transformation process
What does a business need to succeed?
- Organized: helps you complete tasks and stay on top of things to be done
- Keep detailed records: know where the business stands financially and what potential challenges you could be facing (gives you time to create strategies to overcome the obstacles)
- Analyse competition: study and learn from your competitors
4.Take risks: allows you to gain experiences and knowledge - Understand risks and rewards: always calculate the positive and negative sides to a decision and weigh them
Why many businesses fail early on?
- They stop being competitive
- High COP
- Individual doesn’t have enough knowledge on businesses
- Less market power
- Poor staff motivation/training
- Poor management
- Change in external environment
Define local businesses
- Operates within specific geographic area
- Serves small customer base
Define national businesses
- Operates across the country
- Serves larger customer base
- Potentially multiple locations
Define international businesses
- Operates across the world/multiple countries
- Focuses on exporting goods and services to foreign markets
Define multinational businesses
- Business has a presence in multiple markets
- They have operations and management teams in multiple locations
Define an entrepreneur
Someone who is willing to take risks in order to start up a new business or project
Enterprise
The skill needed to make a new idea work, such as creativity
Define business enterprise
An organization that offers goods and services for the motive of generating a profit
What are the qualities of an entrepreneur?
- risk taker
- self-confident
- all-rounded
- innovative
- hardworking
- has a vision
- leadership skills
Define intrapreneurs
People who develop new ideas like entrepreneurs within an already established business
What are the barriers to entrepreneurship?
- The individual may not have enough financial start-up costs/money
- Country may not favor entrepreneurs
- Entrepreneurs failing may not be seen as socially accepted
- Many regulations involved in setting up a business can be discouraging for people
- Governments may prefer to have their own state provision and won’t encourage entrepreneurs with their ventures
Why do governments like entrepreneurs?
- Keeps unemployment low in economy
- competition creates more goods and services in market which provides more choice for consumers
- creates jobs
- earns money and pays taxes
How can governments help entrepreneurs?
- Offer advice and information to help business get started
- Funding for initial start-up costs
- Legal protection for new ideas
What is a business plan?
It’s a document that outlines a company’s business activities and the strategies for achieving its goals while anticipating opportunities and threats
