1.1 Entrepreneur and entrepreneurship

Question 1

Entrepreneur

Answer 1

Business people who see opportunities and are willing to take risks in making them happen in order to earn a profit.

Question 2

Dynamic nature of business

Answer 2

The idea that business is ever-changing because external factors, such as technology, are always changing.

Question 3

Venture capital

Answer 3

risk capital provided by an investor (venture capitalist) willing to take a risk in return for a share un any alter profits; the venture capital provider will take a share stake in the business.

Question 4

Demand

Answer 4

the number of units that customers want, and can afford, to buy.

Question 5

Customer

Answer 5

An individual who BUYS a good or a service (product). They may not necessarily USE the product.

Question 6

Consumer

Answer 6

An individual who USES a good or a service (product). They may not necessarily BUY the product.

Question 7

Obsolete

Answer 7

A good or service (product) with sales that have declined or come to an end as customers find something new.

Question 8

Adapting existing products

Answer 8

Finding new products based on the original one, such as Wall’s White Chocolate Magnum.

Question 9

Competitive advantage

Answer 9

A feature of a business that helps it to succeed against rivals.

Question 10

Original ideas

Answer 10

ideas that have not been done before

Question 11

Invention

Answer 11

An original idea for a product. This may need to have a copyright or a patent to protect it from being copied by rivals.

Question 12

Innovation

Answer 12

Adapting/improving the process of producing a product, for example, Warburton’s extra-large crumpet.

Question 13

Business failure

Answer 13

The collapse of a business, probably leading to its closure.

Question 14

Independence

Answer 14

The need by many business owners to make their own decisions and be their own boss.

Question 15

Lack of financial security

Answer 15

Uncertainty for the business owner about day-to-day family income and assets.

Question 16

Risk and reward

Answer 16

The balance between the worst that can happen and the best that can happen.

Question 17

Customer needs

Answer 17

The products individuals need to make life comfortable.

Question 18

Basic needs

Answer 18

There are five basic needs that an individual needs in order to survive: water, food, shelter, warmth and clothing.
All other ‘needs’ are seen as a want.

Question 19

Customer wants

Answer 19

what individuals choose to spend their income on, once the weekly bills have been paid.

Question 20

Goods

Answer 20

This is a tangible and physical product (it can be touched). For example, products that may be fresh such as apples or manufactured such as Heinz Baked Beans.

Question 21

Services

Answer 21

A product which is intangible (it cannot be touched). It is the skill provided by the worker. For example, a GP, a dentist, an engineer, a plumber or a hairdresser/barber.

Question 22

Branding

Answer 22

Giving a product or service ‘personality’ with a name and a logo that makes them stand out from rivals.

Question 23

Unique Selling Point (USP)

Answer 23

An original feature of a product that rivals are not offering.

Question 24

Value added (i.e. adding value)

Answer 24

The difference between the selling price and the cost of brought-in goods and services. The extra the firm has added to the product before selling it onto the customer. The difference creates the possibility of earning a profit.

Question 25

Business decisions

Answer 25

The choices that have to be made, usually within a short time period.

Question 26

Human Resources (HR)

Answer 26

A term used by organisations that simply means employees (workers).

Question 27

Resources

Answer 27

The things or individuals that can be used/hired to help build and run the business.
Resources could mean employees (human resources), but also raw materials, work-in progress materials - components (parts) and finished products.

Question 28

Risk taking

Answer 28

Making decisions where unknown factors or chances of failure loom large in the decision-maker’s mind.

Question 29

Calculated risk

Answer 29

A risk that has been given thoughtful consideration and for which the potential costs and potential benefits have been weighted and considered.

Entrepreneurs take calculated risks everyday, since they take decisions everyday. Each time they take a decision they are weighing up the significance of the options and (often intuitively) working out whether to go ahead.