1.1 Enterprise and Entreprneurship Flashcards
what is a product?
Anything capable of satisfying customer needs
what is a service?
an act a business carrys out for money
why do new business ideas come about?
- advancements in technology
- changes in customer wants
- products becoming obsolete
what is an original idea?
ideas that haven’t been used before to put a product/service into production.
how would a business create a new product?
- mix and match
- new versions of an old product
- cheaper version of an old product
what is are examples of a risks?
- business failure
- financial loss
- lack of security
what is are examples of a rewards?
- business success
- profit
- independence
what is the equation for profit?
profit=total revenue-total costs
what is needed to produce goods/services?
1) land (a place to work)
2) labor (people to work)
3) capital (money to start a business)
4) enterprise (the drive/motivation to start a business)
what is the purpose of business activity?
to meet customer needs
to add value
what is added value?
the difference between the price a business pays its suppliers and the amount it sells for.
what are skills an entrepreneur needs?
- takes risks
- creative
- innovative
- uses his initiative
what are the 7 main causes of start up failure?
1) starting a business for the wrong idea
2) poor management
3) insufficient capital
4) poor location
5) lack of planning
6) over expansion
7) no/poor quality website
what does obsolete mean?
a product that is no longer used or out of date
what are the advantages of starting your own business?
- keep all profit
- independance
what does an entrepreneur do?
- makes business decisions
- organizes resources
- takes risks
how can changes in technology effect products?
- makes products/services faster
- makes products smaller
- makes products/services cheaper
- makes products and services easier to use
- makes products safer
how can risks be reduced?
- by carrying out market research
- producing a business plan
- ensure a business is competitive
- raise enough start up finance
what makes some businesses riskier than others?
-small market
-highly competitive market
-an owner who knows little about the product or
market
-seasonal demand (eg ice cream)
what is a business/enterprise?
person or organization with the purpose of producing goods/services to meet the needs of customers
how can a business add value?
a business can do this by:
- design
- branding
- usp
- convenience
- quality
what are the benefits of adding value?
added value is used to help pay fixed costs
what is an entrepreneur?
a person who owns and runs their own business
how do entrepreneurs create new products?
through invention and innovation
