1.2

Question 1

What is creative destruction

Answer 1

The constant innovation of a product or service which results in old versions being replaced

Question 2

who created creative destruction

Answer 2

Joseph Schumpeter

Question 3

whta is the main incentive for entrepreneurs

Answer 3

taking risk in order to earn profit

Question 4

What are the 4 factors of production ( CELL)

Answer 4

capital
enterprise
land
labour

Question 5

what steps are needed to create a business

Answer 5

generating the odea
asking if the idea can add value
conducting market research
drawing up a business plan
deciding n legal structure
raising finance

Question 6

when is a business plan used

Answer 6

Externally - Used by banks and investors to decide funding
Internal - entrepreneurs use it as a road map for the firm

Question 7

what may be included on a business plan

Answer 7

Financial forecast
marketing strategies
summary of plans
skills held by employers and entrepreneurs

Question 8

whta may a entrepreneur deal with when it comes to daily decisions

Answer 8

Managing inventories and finances
making marketing decisions ( price and promotion )
dealing with customers
maintaining financial records

Question 9

how may an entrepreneurs focus change as they grow

Answer 9

Employment of staff
use the services of an expert e.g accountant
delegate responsibility
move to larger premises
change supplier
expand product portfolio

Question 10

what is the added value model

Answer 10

inputs —- transformation process —- output

Question 11

What is added value

Answer 11

The ability to ensure that the value of the output is higher than the value of all inputs