Enterprise Flashcards
What is the definition of an SME, turnover
Small and medium-sized enterprise. Less than 50m
Definition of enterprise
A new business or development of a new good or service being introduced to the market
What is the primary sector and examples
First stage of production, use raw materials. Farms, oil, fishing fleets
Secondary sector - what it is, examples
Using primary resources to turn them into products. Manufactures and printers
Tertiary sector - what it is, examples
Provide services. Estate agents and delivery businesses
SME employees - small and medium
Small = less than 50, medium = less than 250
What types of businesses do SME’s tend to be
Sold traders, partnerships, private limited companies
SME’s - uk population + effect
Make up 99.9% of uk population, important to economy. Provide millions of employment for people, key driver of economic growth and sustainability
Importance of SME to uk economy - factors + expantion
- Create jobs (pay tax and spend income on other products going into economy. 67% of uk private sector, 50% GDP)
- create demand for products (more jobs created)
- buy products from other businesses (generates wealth in economy)
- pay tax to gov (pays for hospitals, police)
- introduce new tech + innovation to market
- create competition (good for consumer + growth)
- encourage exports + investments in the UK
Drawbacks of SME’s - factors + expansion
- Small scale (likely to fail in recession and hard ship)
- smaller budgets (don’t have funds to compete with larger organisations, can’t invest as much into R&D, advanced tech, marketing/promotions -> affect ability to offer high quality solutions to customers)
- less recognition, harder to compete
- harder to raise finance and do not obtain economies of a similar scale compared to larger businesses
Needs - definition, examples
Limited number of needs, these must be satisfied in order to survive. Food, shelter, water, warmth, clothing
Wants- definition, examples
Infinite, something that humans desire. Designer clothes, holidays, mobile phones
What are some examples of gaps in the market
- can it satisfy needs and wants
- is there a gap in the market, will it be filled
Does it offer a solution to a problem
What is always happening to the market
It is always changing, new opportunities constantly arise
What does an entrepreneur do
- provide goods/services customers want or need
- create and set up a business involving business idea and financial capacity to make it a reality
What is an entrepreneur
Someone who starts and runs a business
What are the roles of entrepreneurs - factors, examples
- setting up and owning/leading a business
- organisation/managing/planing (setting up machinery, hiring staff, marketing)
- risk taking (pay well lose money put into setting up business as no guarantee of success)
- decision making (finance, employment, marketing)
- create employment
Acting as innovator (bring new products/services to market) - securing finance (internal, external)
- business plan (sets out vision)
- undertaking market research (degree of competition, whether or not gap exists in market)
Entrepreneurial motives (drive for person to set up business) - factors, expansion
- earn a profit (profit maximisation)
- turn hobby or pastime into a business (tend to balance work, customer satisfaction and their freedom)
- use redundancy money/create employment (losing job, with little chance of finding another, use this as start up capital)
- be their own boss (control own destiny, freedom, fit commitments and family)
- take ethical stance (intention of helping others)
- social entrepreneurship (create sustainable profit making business also benefiting community
Key characteristics of an entrepreneur - factors, analysis
- risk taker (risk capital and time to create profits)
- take initiative and proactive (don’t panic or get overwhelm, able to change when needed)
- organiser (undertake a wide range of activities)
- creative, innovative (coming up with innovative concepts and ideas, develop a better way of doing things)
- hard working (52 hours per week, 40 hours thinking/worrying about business venture. Average working week for an employed person is 38 hours)
- determined and perseverance (low success rates, be willing to keep trying if initial ideas fail)
Importance of entrepreneurs
- single minded, work hard, passionate, determined, take risks, organise production
- innovators so bring new ideas to market and drive development of new tech
- provide better way of doing things
- help economy by creating new jobs
- government taxation
Definition of a stakeholder
A person, group or organisation that is affected by and/or has an interest in the operations and objectives of a business
Examples of internal stakeholders
Employees, manager, owners
External stakeholder examples
Suppliers, society, government, creditors, shareholders, customers
Definition of stakeholders
They are groups within a business