Enterprise Flashcards
what is a business enterprise
the formation of a new business or development of a new good or service to be introduced to the market
why do people start their own businesses
1 . To gain a profit
2 . To turn a hobby or a pastime into a business
3 . To be their own boss
4 . To use redundancy money and provide themselvs with employment
what are the characteristics for a entrepreneur
being a risk taker -they risk capital
be hardworking
committed / determined / motivated
be able to cope with stress
a good judge of people
innovative - creative
leadership qualities
demonstrates initiative
understanding of the market
what are the motives of an entrepreneur
financial reward - opportunity to earn more when owning a business.
prefer to make their own decisions - in control of what they do in do as opposed of being employed
greater job satisfaction - creating and building a business can be very enjoyable and allow individuals to attain certain goals they have set themselves
to create employment - this may be a result of being made redundant or desiring to create work for others
passion / interest in what they produce - may enjoy producing a top quality product or inventing a new process
what are the various stakeholders affected by a business
owner/shareholder
managers
employees / workers
customers
suppliers
competition
financiers / lenders
local community
government
what is the importance of entrepreneurs on the success of the economy
government benefiting from taxation that is generated from the revenues of the business
increasing exports - helps balance payments
help to boost the economy by providing new products
helps boost the economy by creating new jobs
entrepreneurs have the vision and the willingness to take the risk to drive the business forward
Entrepreneurs tend to be single-minded, prepared to work hard, passionate / determined / ambitious, have ability to organise production, are prepared to take risks and are innovative – possible use of examples of entrepreneurs to illustrate points.
what is a SME
are businesses whose personnel numbers fall below certain limits.
how does SMEs positively impact the economy
SMEs create jobs – businesses require a number of employees to help run and operate the
business. These people pay tax and spend income on other products and services which goes
into the economy;
Critical to the UK economy as they make up 67% of the UK private sector jobs and contribute
50% of GDP;
SMEs create demand for products which in turn creates more jobs and other businesses;
SMEs buy products and services from other businesses in order to produce finished goods
thus helping to generate wealth in the economy both local and national;
SMEs pay tax to the government – theses businesses are required to pay business and corporation tax. This goes to the government to pay for things such as hospitals, police and schools;
SMEs introduce new technology and innovation to the market – they come up with new technologies, create new products and provide new services
for people in the UK and abroad;
SMEs stimulate the economy by instilling confidence in people – having a healthy economy
makes people more confident to invest;
SMEs help to create competition which is good for the consumer and growth.
how are larger businesses more significant than SME to the economy
SMEs are small scale and more likely to fail in times of recession and hardship; Many SMEs
fail! Larger businesses are able to survive during harder economic times;
Smaller budgets – do not have funds to compete with larger organisations to put into R&D,
advanced technology, marketing and promotions which may affect the SMEs ability to offer high
quality solutions to customers;
Less recognition and harder to compete with well-established larger businesses;
Harder to raise finance compared to larger organisations who can sell shares. Banks are more
likely to lend money to larger more established businesses.
Larger businesses can take advantage of economies of scale and better compete on price.
what are business opportunities
Needs and wants are not fixed. They can change quickly as fashions and lifestyles change, and also over the longer term as incomes increase and population changes. This means that markets are always changing. new opportunities are constantly arising.
