1.1.3 The role of business enterprise

Question 1

Purpose – to produce goods
and services

Answer 1

Land – somewhere to produce the goods e.g. a farm
Labour – people to work in the business e.g. farm
workers
Capital – money to get the business started
Enterprise – This is the drive or motivation from the
owners to start a business

Question 2

Purpose – to meet
customer needs

Answer 2

Fast, efficient and accurate service
High quality products at a competitive price
Friendly, helpful service staff to provide information and answer questions
Prompt responses to their inquiries, whether online, by phone or in person

Question 3

Purpose – to add value

Answer 3

Added value – the difference between what a business pays
its suppliers, and the price it is able to charge for its product
or service

Question 4

An entrepreneur – organises
resources

Answer 4

Enterprise is about
taking risks, being
creative and innovative
and using your initiative

Question 5

An entrepreneur – takes risks

Answer 5

Risk taking – Setting up a
business is risky, money has
to be paid out in advance to
buy materials, equipment
and wages