1.3 Enterprise, business growth and size Flashcards
What are the characteristics of a successful entrepreneur?
- Innovative
- Self confident
- Risk taker
- Optimistic
What is a business plan? What does it contain? How does it assist entrepreneurs?
- Business plan: a complete description of a business- Plans -Financial forecasts
Helps entrepreneurs define and focus business ideas
Why does the government support business start-ups?
- Increase employment
- Increase Exports
- New technology
How does the government support start-up enterprises?
- Provide advice
-Subsidies
-Tax breaks
-Free premesis
What are the methods of measuring business size? What are the limitations of these methods?
- Labour employed
- Value of output
- Capital employed
- Market share
Limitations:
methods can produce different results so more than one method should be used in measuring the size of the business.
Why is business growth beneficial? What are some methods of business growth?
- Business growth: able to cut costs and win a greater share of the market- develop new products or sell to new markets- can be external or internal.
- Internal growth: investing in new products or selling more of existing products.
- External growth: involves the takeover of another business or merger with another business.
What are the problems concerned with business growth?
- More difficult to control staff
- Lack of funds
- Lack of expertise
- Diseconomies of scale
Why do some businesses remain small?
-Owners objectives
-Size of the market
-Competition of market
Why do some businesses fail?
- Not having enough cash to pay outstanding bills
- Low profit margins
- Failure to meet requirements of customers
-The level of competition
-Changes in laws and regulations
Why are new businesses are at a greater risk of failing?
- Less experience
- New to the market
- Not a lot of sales yet
- Don’t have a lot of money to support the business yet
