1.B The Personal Motivation Behind Starting A Business

Question 1

What determines the success/failure of a business?

Answer 1

The success or failure of a business depends largely on the owner’s abilities, resources, enthusiasm, initiative, level of management expertise, decision-making skills and, above all else, motivation.

Question 2

What are the personal motivations for starting a business?

Answer 2

• Desire for independence
• Earn a profit
• Fulfill a market need
• Fulfill a social need
• Freedom to choose the place of time and work
• Greater control
• Potential long-term financial independence

Question 3

Explain the personal motivation to make a profit with an example.

Answer 3

The hope of eventually achieving a monetary reward from self-employment. For example, Amazon had revenues of $1.6 billion in 1999, but they still managed to lose $719 million. It took until 2003 for Jeff Bezos to turn a profit.

Question 4

Explain the personal motivation to fulfil a market need.

Answer 4

Recognising a demand for goods or services in a particular location that is not currently available. Invention or development of a new product.

Question 5

Explain the personal motivation to fulfil a social need.

Answer 5

A business that makes a profit but supports a social/environmental need. Profits are reinvested into the business so it can continue to fulfil its need. Eg. charcoal lane and second bite.

Question 6

Briefly explain the company Second Bite.

Answer 6

Started because the couple couldn’t stand to see perfectly good food going to waste when there were hungry people in the community. Identified the need to redistribute safe-to-eat but unable-to-be-sold food. Volunteers receive the food from refrigerated vans, then it is taken to a warehouse with cold storage. It is then sorted after it is either delivered in food parcels, cook dine-in meals or run school meal programs.