Chapter 1- Enterprise and business Planning Flashcards
PRIMARY SECTOR:
what does the primary sector provide for us?
provide food we need through farming
how does the primary sector provide power for us?
through mining
where does the primary sector extract oil from?
the North Sea
SECONDARY SECTOR:
in the secondary sector, what do private enterprises provide us with? (list)
massive amount of consumer goods-
- manufacturing cars
- processing food
-making clothes
-designing and producing consumer electronics
(all goods that surround us in shops we visit, that help satisfy our every want).
TERTIARY (SERVICE) SECTOR:
in the tertiary sector, what do private enterprises provide us with? (list)
-gyms
-offering financial advice
-operating fleets (navies) of buses and trucks
-prepare marketing campaigns
,etc…
In the UK, how many separate businesses are there?/ how many people are they employing?
almost 5 million employing 24 million people
what are sole proprietors?
self- employed people who own/ run their own business
out of the almost 5 million businesses in the UK, how many of them are sole proprietors?
over 3.3 million
what are partnership businesses?
2 or more ‘partners’ carrying out a business with a view to making a profit
how many businesses in the UK are partnerships?
around 500 000
what are limited companies?
business structure where the company has a legal identity of its own, separate from its owners/ managers).
how many people do SMEs (small and medium- sized enterprises) employ?
around 14.4 million people
what’s a turnover?
total sales made by a business in a certain period
how much money do SMEs have a combined turnover of?
£1,600 billion
What is the main reason people start businesses?
to gain profit (financial gain)
for an entrepreneur who is starting a small business for the first time, would the main goal just be about money?
no, even so earning a decent income in the source of profit will be a major focus
Besides gaining a profit what’s the other reason people start their own businesses?
to turn a hobby or pastime (passion) into a business
- many new entrepreneurs are able to do this
instead of maximizing profits, what things do the entrepreneurs who turn their hobbies into businesses balance?
work
customer satisfaction
their own freedom to live a lifestyle they are content with
- this is known as ‘satisficing’
what is ‘ satisficing’?
decision making that aims for a satisfactory result/ not using all energies trying to maximize income
Another reason people start businesses is to use ———- money. fill in the gap.
redundancy money
explain what redundancy money is and why people use it to start businesses
your job role is no longer required and your company provides a finance package yo say sorry- can be ‘’ for every year you have worked, we’ll pay you a monthly salary’’
-e.g. if you’ve worked for 10 years, they’ll pay you a certain amount for 10 months.
why else do people start their own business besides redundancy money?
to be their own boss
- people often just want to be their own boss, in control of their own destiny
what are entrepreneurs who start a business to be their own boss often searching for?
an idea they can turn into a business
what is studying business not just about?
looking at big businesses like BP, Apple, Sony/ hundreds of others who are worldwide (multi-national) enterprises, with billions of £s in assets and profits.
how are small businesses also important to the economy?
a huge number of separate enterprises are helping to innovate/ drive economic growth
- creating opportunities for employment and satisfy consumers’ needs and wants
are needs and wants fixed?
no, they can change quickly
what changes needs and wants?
- incomes increase
- population changes
because wants and needs are continuously changing, what does this cause to also change?
markets
what qualities can cause an entrepreneur to succeed even in the most competitive of markets?
- having an idea
- commitment
- funds (investments)
what do economists say needs are?
what people require to survive
give examples of needs
- food
-warmth
-shelter
clothing
education
healthcare
-security– being safe
what are wants?
what we desire, what we would like to have
give examples of wants
- nicer clothes
- not just basic functional items
- a new phone every year
- a massive flat screen TV
- detached house with a pool
- holidays in Maldives
what is an entrepreneur? /
explain scenarios
someone who starts and runs a business/
perhaps he or she makes a product then sells it or provide a service
why do entrepreneurs employ people?
to try and make a profit
why do many countries and governments place great value on entrepreneurs?
because of how they create wealth in an economy
most entrepreneurs are innovators. how?
they bring new ideas to the market/ drive development to new technologies
name an example of an entrepreneur who is an example of being an innovator by bringing a range of products to the market
James Dyson of Dyson vacuum cleaner fame
One key characteristic of an entrepreneur is being a ———
risk taker
since entrepreneurs are not always about new products or new ideas , what are they often just doing?
doing things better than they were before
entrepreneurs risk capital. what is capital?
money they put into the business to start it
what other things besides capital do entrepreneurs risk?
- their own time to try to create profits
- they may remortgage their house ( ask the bank for money for their business against their house is they fail to pay them back).
- borrow from friends and family
- give up well- paid jobs to try to make a success out of their business ideas
another key characteristic of being an entrepreneur, is taking the ———- and being ———
initiative , proactive
successful entrepreneurs are able to take the initiative when required. how do they do this?
they do not panic/ allow events to overwhelm them
as successful entrepreneurs are also proactive, what does this mean they do?
able to change as needed
another key characteristic of being an entrepreneur is being an effective ———
organiser
as being an effective organiser is essential for running a business, what activity examples may the entrepreneur need to undertake?
- hiring labour (work)
- buying inputs such as raw materials
- producing the finished product for sale
Another characteristic of being an entrepreneur is having ———- and being ———-
creative, innovative
explain why creativity and being innovative is a key characteristic of being an entrepreneur
creativity in business means the ability to come up with innovative (new) concepts and ideas, or developing a better way of doing things
how do we now have google?
Two American college students working in their college dorm in 2003 has the view that there had to be a more efficient way of gathering data for internet search engines
Another key characteristic of being an entrepreneur is being hard ——-
working
it estimated that entrepreneurs in the UK work for around an average of how many hours per week?
52
besides working an average of 52 hours per week, how many hours do entrepreneurs in the UK spend thinking or worrying about their business venture (journey)?
40
comparing how many hours entrepreneurs spend working per week/ stressing about their business venture, what is the average hour working week for an employed person?
38 hours
Another key characteristic of being an entrepreneur is being ———- and having ————
determined, perseverance
what is a discouraging factor which requires entrepreneurs to be determined(especially new ones)?
new businesses have low success rates
how must entrepreneurs have perseverance ?
be willing to keep trying if initial ideas fail
IDENTIFYING BUSINESS OPPORTUNITIES:
when do potential business opportunities occur?
when a market need exists
-this market need is preferably one that has not yet been targeted or targeted effectively
what will a new entrepreneur wanting to start/ run a successful business will need to find when identifying business opportunities?
a product or service that isn’t already available , or one that can be improved on
what can a starting point for a new entrepreneur when looking for a product or service that isn’t already available, or ne that can be improved on?
finding out what is missing in the local area
Another findings of opportunities might be to ask what question?
’ what can be offered to other businesses that would help them increase their sales, improve their service, or reduce their costs?’
what can a business do for another business to find business opportunities/ explain how
service another
- these other businesses have customers who are different businesses, they may supply office equipment , cleaning, marketing services, transport, IT services, financial services, etc.
Sometimes identifying a potential business opportunity can occur through word of mouth. how?
are people complaining about lack of access to a product ,or describing a need, or criticizing a business?
- all of these could present an opportunity
Many new market places are based on accessing customers through new market places , what can be bought here?
products and services
what are the benefits of moving away from bricks and motor (buildings)?
reduces cost/ allows prices to be cut
what is a good example of moving away from bricks and motor ?
the internet
- Amazon/ Ebay are prime examples of new businesses which are based on price, buying opportunities and convenience (benefit)
Is it only big businesses who can succeed through the method of a new market place?/ give an example
no
- Foulgers Dairy shows how a small firm targeting a specific market (raw milk) can take advantage of new ways of accessing customers worldwide
