Business Activity

Question 1

What is enterprise?

Answer 1

Seeing an opportunity to provide a product or service that people are willing to buy

Question 2

What is an entrepreneur?

Answer 2

Someone who takes a risk to set up and run a business

Question 3

What are the characteristics of an entrepreneur?

Answer 3

• Creative
• Risk taker
• Determined
• Confident

Question 4

What are the risk of starting a business?

Answer 4

• Finance: You could lose money/ go bankrupt,
• Health: mental health may decrease because of a poor work-life balance,
• Strained relationships: Owning a business will take up your time and not allow you to see loved ones as much

Question 5

What are the benefits of starting a business?

Answer 5

• Financial: the greater the risk, the greater the reward you could get,
• Independence: business owners tend to follow there own rules, don’t like to take orders
• Self satisfaction: an entrepreneur may make a business just for self satisfaction,
• Changing customer habits: businesses will be able to retain customers.

Question 6

What will a business plan contain?

Answer 6

• Business idea
• Who’s involved
• Market research
• Finance
• Aims and objectives
• Competitors

Question 7

What is the role of business plan?

Answer 7

• Identify market
• Helping with finance
• Identify resources
• Achieving aims and objectives
• Entice potential investors.

Question 8

Name the four kinds of business ownership.

Answer 8

Sole trader, partnership, private Limited & public Limited

Question 9

What are the pros of being a sole trader?

Answer 9

• Easy to set up
• Little finance required
• Have all control
• Profits
• All access to financial information

Question 10

What are the cons of being a sole trader?

Answer 10

• Unlimited liability
• Illness can cause the business to go bust
• No holiday/ sick pay
• Cant go on holiday
• Not easy to raise finance

Question 11

What are the pros of partnership?

Answer 11

• More people are working together,
• Easier to raise finance by inviting more partners
• You can take holidays and your business can still run if you are ill

Question 12

What are the cons of partnership?

Answer 12

• Profits must be shared between partners

- unlimited liability

Question 13

What is unlimited liability?

Answer 13

When you are personally responsible for debts of the business

Question 14

What is limited liability?

Answer 14

When the business has is responsible for its own debt

Question 15

What are the pros of being a private limited company (Ltd)?

Answer 15

• Easier to raise extra finances to grow the business
• Limited liability
• Can operate on a large national or international scale

Question 16

What are the cons of being a private limited company (Ltd)?

Answer 16

• Lots of paper work and legal forms to start
• Have to publish annual accounts
• Give part of your profit to shareholders

Question 17

What are the pros of a public limited company (PLC)?

Answer 17

• Raise large amounts of finance by selling shares on the stock market
• Unlimited liability

Question 18

What are the cons of a public limited company (PLC)?

Answer 18

• Company can be overtaken by shareholders
• Very expensive to publish detailed accounts
• Have to give profit to shareholders (dividends)

Question 19

What is an aim/ objective?

Answer 19

Aim:
A long term goal
Objectives:
Steps to reach an aim

Question 20

What are the 5 main aims of a business?

Answer 20

Aims:

• Market share
• Survival
• Profit
• Growth
• Providing a service

Question 21

What are stakeholders?

Answer 21

People who are interested in a business