Chap 3. Enterprise, Business Growth And Size Flashcards
Define entrepreneur.
Someone who invests and takes the risk of starting a new business venture
Give some characteristics of a successful entrepreneur.
. Risk taker
. Hard working
. Innovative
. Creative
. Self confident
. Independent
. Leader
. Effective communicator
. Multi skilled
List some advantages of being an entrepreneur.
. Enjoys all profit made by business
. Own boss and does not take orders from others
. Acquires fame and becomes well known for managing a business
. Job satisfaction as he puts his ideas, skills and talents into the firm
List some disadvantages of being an entrepreneur.
. May lose all money invested in the business
. May have limited capital
. Shoulder all risks and responsibilities alone
. Unlimited liability
. If sick, there is lack of continuity of the business
. May not have necessary knowledge to manage firm
What is a business plan?
It is a document that give details about activities, objectives, finance and owners of the business
List the content of a business plan.
. Description of business
. Products and services
. The market
. Business location and how the products will reach customers
. Organisation structure and management
. Financial information
. Business strategy
Give 2 uses of a business plan.
. To help gain finance
. Careful planning reduces risks
List the 4 ways that we can measure size of businesses.
. Number of employees
. Value of output
. Value of sales
. Value of capital employed
Give the disadvantage of measuring size of a business by “number of employees”.
Some firms may use capital intensive and produce more compared to another firm who has more workers and produce less
Give the disadvantage of measuring size of a business by “value of output “.
Some firms may produce less output and have a greater value of output
E.g a jewellery store would produce 100 jewelleries and a value of Rs 1million compared to a match stick company producing 50 000 output but have a value of Rs 100000
Give the disadvantage of measuring size of a business by “value of sales”.
Some firms may make less sales but have a greater value of sales
E.g firm A may have a level of sale of 50000 and a value of sales of Rs 400000 while another firm B may have a level of sales of 200 and value of sales of Rs 30million
Give the disadvantage of measuring size of a business by “value of capital employed “.
Some firms may invest more but be of the same size
E.g firm A may invest Rs 3million and be a small cafe compared to firm B who invested Rs 50000 and is a tailor
Why will “investors” find it useful to measure size of a business?
To decide which business to put their money in
Why will “government” find it useful to measure size of a business?
To determine how much tax revenue it will get from different firms
Why will “bank” find it useful to measure size of a business?
To find out if the firm is able to pay their loan
Why will “consumers” find it useful to measure size of a business?
They will be concerned about the continuous supply of the required products, prices and quality
Why will “workers” find it useful to measure size of a business?
To determine job security, bargaining power for better salary and working conditions
Why will “owners” find it useful to measure size of a business?
To determine their position in the market