1.1 Enterprise and Entrepreneurship Flashcards
What is Business Enterprise?
The process of identifying new business opportunities and taking advantage of them
ie starting a new business or helping expand by coming up with new ideas
What are some purposes of business activity?
- Provide goods and services
- Meet customer needs
- Add value to products
How can a business add value to their products?
- Quality
- USP
- Convenience (in availability or use)
- Reputable brand image of the product
Why does a Good brand image add value?
Customers are more willing to spend money on a product from a recognisable brand that is trustworthy and desirable
Why does a USP add value?
Adds features that makes it different from its competitors
Why do businesses have to be dynamic?
The world is changing (ie economy, customer needs, trends), so businesses have to be dynamic to adapt to these changes
How do new business ideas come about?
- Changes in technology
- Changes in Customer needs
- Good or Service becomes obsolete
- New, original idea or an adaptation of an existing product or idea
What are the roles of an Entrepreneur?
- takes risk
- organise resources
- make business decisions
How do Entrepreneurs take risks?
- Give up stable job
- invest money/savings into the business that could be lost if the business fails
- can write a business plan to be able to take calculated risks (still risky)
How/ Why should entrepreneurs Organise Resources?
- Keep on top of day to day tasks
- Also planning ahead
- make sure the business has the right resources at the right time (money and suppliers etc)
What do entrepreneurs do to Make Business Decisions?
- decide on the business’ aims
- the structure
- employment
- how to grow
- how to handle the business if things start to go wrong
What are Risks to starting a business?
- Financial loss
- Lack of Security
- Business failure
What are the Rewards to starting a business?
- Business success
- Profit
- More Independence
How is Financial loss a risk?
- need money to pay workers, buy equipment etc
- Entrepreneur has to use their own money (loss of savings), but also raise funds from banks, investors etc
- If the business makes a financial loss, it won’t be able to pay back the borrowed money, and will struggle to survive
How is Lack of Security a risk?
- Give up stable job to run business
- If the business fails, they lose money and have no job (source of income)
- massive impact on quality of life
