Chapter 1- Enterprise

Question 0

What is meant by the term “enterprise skills”?

Answer 0

Skills that allow an individual or organisation to respond effectively to changing market situations, including problem solving skills, thinking and acting innovatively and creatively.

Question 1

What is meant by the term “enterprise”?

Answer 1

The term Enterprise usually refers to the process by which new businesses are formed and new products and services are created and bought to the market.

Question 2

What is meant by the term “entrepreneurs”?

Answer 2

Individuals who have an idea that they develop by setting up a new business and encouraging it to grow. They take the risk and subsequent profits that come with success or losses that come with failure.

Question 3

What are the characteristics of successful entrepreneurs?

Answer 3

• determination and persistence
• passion
• ability to spot and take advantage of opportunities
• relevant skills and expertise
• vision, creativity and innovation
• motivation to succeed and not be daunted by failure
• willingness to take risks

Question 4

Why might business failure occur?

Answer 4

• lack of finance
• poor infrastructure
• skills shortage
• complexity of regulations

Question 5

What is meant by the term “opportunity cost”?

Answer 5

The “real cost” of taking a particular action or the next best alternative forgone

Question 6

Opportunity cost in business

Answer 6

Resources: four factors of production.

Money and time.

Question 7

What are the reasons for the UK becoming an increasingly entrepreneurial place?

Answer 7

• long term interest rates making it easier to burrow money
• a change in political climate: government supporting business start ups
• increasing affluence

Question 8

What are the motives to become an entrepreneur?

Answer 8

• high profit rates
• independence
• introduce a product that they deem important for people

Question 9

Why does the government support enterprise?

Answer 9

• crucial for the economy
• improves a country’s productivity
• for the country’s growth and prosperity

Question 10

Why support SMEs (small and medium sized enterprises)?

Answer 10

They boost economy’s productivity by increasing competitive pressure.
Existing businesses will force themselves to increase their own efficiency otherwise they are forced to leave market/ market share is reduced.

Question 11

How did the government make it easier to start up a business?

Answer 11

• reducing business taxes
• reducing regulatory burden
• reducing barriers to raising finance
• more support to new and small businesses
• promoting a change in UK’s enterprise culture
• funding projects to raise awareness about enterprise