BUS1

Question 1

What are the motives for setting up a business?

Answer 1

More control over working life
Fulfil potential
Escape uninteresting job
Declare to pursue a hobby
Satisfaction
Be own boss
Earn income

Question 2

Characteristics of successful entrepreneurs

Answer 2

Passionate, getting things right for the customer
Driven
Self starting
Calculated risk taker
Multi tasker
Resilient
Focused
Leadership
Initiative

Question 3

What are the risks of setting up a business?

Answer 3

Unlimited liability
Loss of pay from previous job
Stigma of failure

Question 4

What are the rewards of starting up?

Answer 4

Potential for significant income and profit
Satisfaction
Freedom of decision making
Control over working life

Question 5

What are sources of government support?

Answer 5

BIS: dept for business, innovation and skills
DirectGov: advice on tax and business laws
Tax incentives: tax breaks for investments
Other support: online, business networks, professional firms

Question 6

What is an opportunity cost?

Answer 6

The cost of missing out on the next best alternative

Question 7

How do opportunity costs affect start ups?

Answer 7

Resources are limited

Significant decisions about spending become risky due to this

Question 8

What are common sources of business ideas?

Answer 8

Brainstorming
Business experience
Personal experience
Copying an existing idea
Invention and innovation

Question 9

What makes a good business idea?

Answer 9

Something that solves a problem
Cheaper way of providing existing product
Clearly focused on needs of the customer

Question 10

Patents?

Answer 10

Must be based on inventions that are new, innovative
Given up to 20 years protection
Expensive

Question 11

Trademarks?

Answer 11

Identifies a product in the eye of a customer
Name, logo, symbol
Prevent others from using something similar
10 years

Question 12

Copyright?

Answer 12

Important source of protection for any startup in creative or knowledge industries
Lasts for 70 years after authors death

Question 13

What is added value?

Answer 13

Difference between price of finished product and costs of inputs used in making it

Question 14

If you add value, can you higher your prices?

Answer 14

Yes

Question 15

what is a niche market

Answer 15

a smaller, specialist part of a larger market where customers have specific wants and needs organic food produce

Question 16

what are advantages of niche markets

Answer 16

better to add value
customer needs are defined
charge higher prices
encounter less competition

Question 17

disadvantages of added value

Answer 17

customers more demanding
competitors have an established customer base
less able to benefit from cost savings with operating at a higher scale

Question 18

what is a franchise

Answer 18

the business format which a franchisor allows a franchisee to use under licence

Question 19

what are the two ways to segment a market

Answer 19

geographic based on the countries, reigons

demographic based on class, age, gender

Question 20

what is market research

Answer 20

information that helps explain the structure size and nature of the market

Question 21

what is a national market

Answer 21

where customers are spread throughout the country or over a large geographical area with the same product offered everywhere

cadburys

Question 22

What is demand

Answer 22

how much customers are prepared and willing to buy at a given price

Question 23

three ways to measure the market

Answer 23

market size
market growth
market share

Question 24

advantages of a limited company

Answer 24

limited liability
easier to raise finance
stable form of structure

Question 25

disadvantages of a limited company

Answer 25

greater admin costs | public disclosure of company information

Question 26

what does limited liability do

Answer 26

provides the entrepreneur with significant protection

Question 27

internal sources of finance

Answer 27

personal sources retained profit sales of assets

Question 28

external sources of finance

Answer 28

``` share capital friends and family loan overdraft grants trade credit factoring ```

Question 29

factors affecting the amount and choice of finance

Answer 29

control cost amount time and flexibility

Question 30

what is a location

Answer 30

the physical place from which a business is operated and controlled

Question 31

benefits of a home based setup

Answer 31

very low cost little travelling lower business risk freedom of what to wear

Question 32

drawbacks of home based setup

Answer 32

``` requires greater self discipline work often interrupted work never goes away lonley poor impression??? ```

Question 33

why does cost matter in choosing the location for a startup?

Answer 33

raising breakeven output low cost doesnt always mean best try to minimise initially share location with other startups

Question 34

why does proximity to market matter in the location for a startup?

Answer 34

needs to be suitable cut distribution cost depends on nature of the startup products

Question 35

why does infrastructure matter when locating a start up?

Answer 35

could rely on external services | ability to recruit right employees may be affected by local infrastructure

Question 36

why does personal and other qualitative issues matter when locating a startup

Answer 36

location help create USP which could help attract customers and stagg fit the culture of the start up

Question 37

what is a consultant

Answer 37

an individual or business external to the business that provides specific advice and service

Question 38

What is an entrepreneur?

Answer 38

Someone who sets up a business