Chapter 1 - Intro To Business Flashcards
What is the definition of an enterprise and an entrepreneur?
An enterprise is simply a term for ‘a business’ 🏢
An entrepreneur is a risk taker who sets up a business (a businessman or woman)👩🏻💼👨🏻💼
What are the characteristics of an entrepreneur
- they have self belief and confidence
- they have persistence and drive
- they have the ability to work under pressure
- they have creativity and imagination👩🏻🎨
- they have the ability to be comfortable with risk
- they have leadership skills e.g. Motivation and communication
- they have energy and enthusiasm
What are the factors of production
They are the inputs that are used in the production of goods and services, they are:
- land
- capital
- labour
- enterprise
What are the constraints on a business
A constraint is a restraining factor on a business, it’s something that limits how the business operates they are:
- environment
- competition
- the economy
- legislation
What are the functions within a business?
- Accounting and finance
- Operations management and production
- Marketing and support services
- HRM
What is chain of production?
Stages that a product passes through until it reaches the final consumer
What are the three sectors?
- Primary sector - are concerned with extractive industries e.g. Farming
- Secondary sector - are concerned with manufacturing, that is turning raw materials into semi-finished products
- Tertiary sector - are concerned with the output of services
What is the private sector and the public sector?
The private sector is businesses owned and run by private individuals - usually for profit 💰💰
The public sector is businesses and organisations owned and run by local or central government, whose objective is to provide a service rather than make a profit 🚑🚔🏥
What is Deindustrialisation?
The decline in the size of the secondary sector of the economy
What is a sole trader?
One person who runs and owns the business 👤
What are the advantages of being a sole trader?
- there is less conflict because the sole trader can make decisions by themselves 😊
- sole trader gets to keep all the profit 💰💰
- easy to set up 🔨
- business can be based on interest or skills 👩🏻🎨
Disadvantages of being a sole trader
- It has unlimited liability 💸
- They must single handedly perform all of the businesses functions which can be stressful 😡😭
- It’s hard to raise capital for expansion 💰⬆️✖️
- There is no continuity 🔚
What is a partnership?
When two or more people run a business and the law require a maximum of twenty partners 👥➡️2️⃣0️⃣
They are common in professions like solicitors, dentists and accountants 👨🏻💼👩🏻💼👨🏻⚕️
Advantages of a partnership
- It is easy to set up 🔨
- Additional partners means there is more capital. Expansion is therefore likely easier ➕
- Different partners can have different skills👨🏻⚕️👩🏻🎨👩🏻💼
- Losses are shared 🤝
- Financial state of the business can be kept private 📈❌
Disadvantages of a partnership
- They have unlimited liability
- Decision making is slower and therefore is a possibility of a disagreement
- Profits are shared
