1a Personal motivation to starting a business Flashcards
What are the 5 personal motivations for starting a business?
- Personal Independence
- Financial Independence
- To make a profit
- To fulfil a market need
- To fulfil a social need
What is the definition of Personal Independence?
To be your own boss and not have to do what other people say, and be in charge of the decisions made for your business.
What is the definition of Financial Independence?
When you choose what your income is, and how much is put into the business.
What is the definition of Making A Profit?
Making a profit is when you earn more then what you spent to launch your business or a new product.
E.G - You spent $100 to buy all the ice-cream and earned $130 selling it, you made a $30 profit.
What is the definition of Fulfilling A Market Need?
To fulfil a market need is when you fill in a Gap in the market.
E.G - When something isn’t being sold in an area, that is a gap in the Market.
What is the definition of fulfilling a Social Need?
To fulfil a social need is when a business helps address a common problem affecting society. (a business that exists to address a social need is called a social enterprise)
E.G - Helping by preventing homelesness.
What is the definition of goods?
Goods are physical items that satisfy an individuals wants or needs.
E.G - A car or clothing.
What is the definition of services?
Services are actions that are performed for an individual.
E.G - A doctors appointment.
What is the definition of revenue?
Revenue is the amount of money that a business makes from its normal business activities.
What is the Profit Formula?
Revenue minus costs
Revenue = income / turnover
Cost = business expences
