business unit 1

Question 1

what are the reasons for starting a business

Answer 1

to be your own boss, to keep all the profits, to fulfill a dream, unhappy in current or old job, to fill a gap in the market

Question 2

what are the factors of production

Answer 2

land-the physical land and site of a business and the natural resources they may use
labor- the skills and number of employees employed by a business
capital- the equipment used for a business to provide a good or service
enterprise- another word for business. the skills of people in the business to be able to identify business opportunities and how they gather resources to make this happen

Question 3

what are some characteristics of entrepreneures

Answer 3

resilience, determination, hard working, organized ,innovative ,passionate

Question 4

what are the sectors of industry

Answer 4

primary
secondary
tertiary

Question 5

what is opportunity cost

Answer 5

the sacrifice of making one decision over another decision and the lost benefits that come with that e.g location

Question 6

what is social enterprise

Answer 6

a business set up to help society rather than focus on profit

Question 7

what is an entrepreneur

Answer 7

someone who is willing to take the risk and set up a new business

Question 8

what is an interest rate

Answer 8

the cost of borrowing money or the reward for saving money, expressed as a percentage

Question 9

what is GDP

Answer 9

gross domestic product. measures income made by a countries economy in a year.

Question 10

inflation

Answer 10

the rate at which prices are rising

Question 11

what is flotation

Answer 11

when a private limited company (ltd) becomes a public limited company (plc) and has stocks on the stock exchange

Question 12

what is a sole trader

Answer 12

someone who sets up a business on their own

Question 13

what is a partnership

Answer 13

when two or more people join together in a business to persue profit

Question 14

what is the purpose of setting up a business plan

Answer 14

1- to co ordinate actions
2-set aims and objectives
3-help to raise finance :can be shown to potential investors
4- can help new businesses set up sucsessfully

Question 15

what could be some problems with business planning

Answer 15

1-uncertainty. hard to predict what will happen in the future. maybe innaccurate
2-lack of experience-thoes who are setting up a business may not have skills
3- change. conditions are always changing

Question 16

how to reduce the risk of a business plan

Answer 16

1- reasearch market thouroughly
2-talk to experts or consultants
3-plan for a variety of outcomes
4-regually review and update plan

Question 17

what are the main sections of a business plan

Answer 17

-background info on founders and investors, skills and experince
-objectives
-expected profits
-analysis of market
-analysis of financial position, predicitions of cash flow and profit

Question 18

why may a business change aims and objectives

Answer 18

when a business grows and evolves. may change during economic ethical standards technological change

Question 19

what are some advantages of picking overseas location

Answer 19

cheaper labour wages
lower taxes
may have higher demand