Enterprise

Question 1

Why do people start their own business?

Answer 1

• to produce goods
• to distribute products
• to provide a service
• to help others
• to meet the needs of society
• to make a profit
• not for profit/social enterprises

Question 2

Enterprise

Answer 2

Process by which new businesses are formed and new products and services are created and brought to market. New enterprises are usually set up by an entrepreneur.

Question 3

Entrepreneur

Answer 3

Someone who is willing to take a risk in setting up and running a business.

Question 4

SME’s

Answer 4

Small to medium enterprises
- start of 2016 there were 5.5 million private sector businesses in the UK.
- 99.9% were SMEs.
- Total employment in SMEs was 15.7 million; 60% of all private sector employment in the UK.
- Combined annual turnover of SMEs was £1.8 trillion, 47% of all private sector turnover in the UK.
- 76% of businesses did not employ anyone aside from the owner.

Question 5

Sizes of businesses

Answer 5

Micro business- 0-9 employees.
Small business- 10-49 employees.
Medium business- 50-249 employees.
Large business- 250+ employees.

Question 6

Businesses potential

Answer 6

Good idea + Entrepreneur = Business potential.

Question 7

What makes a good idea?

Answer 7

• Solve a problem.
• Offer a better, cheaper way.
• Simple and practical.
• Delivered quickly.
• Have a clear focus.
• Anticipate trends and exploit growing markets.

Question 8

Sources of business ideas

Answer 8

• Personal experience
• Business experience
• Market research
• Eureka moment
• Brain storming
• Own need

Question 9

Gap in the Market

Answer 9

Good ideas need customers. There is no point creating a product or a service unless someone wants to buy it.

Question 10

Needs and wants

Answer 10

Needs:
- What we need to survive:
- food, clothing, warmth, shelter
- Could also include:
- Education, healthcare, security- being safe.
Wants:
- What we desire, what we would like to have:
- Nicer clothes, a new phone, 50” TV, detached house with a pool, holiday abroad, new car.
The potential to satisfy needs and wants can give opportunities to entrepreneurs.

Question 11

Characteristics of an entrepreneur

Answer 11

• Risk taker
• Taking initiative/being proactive
• Organised
• Creative and innovative
• Hard-working
• Determined/perseverance
• Have vision
  -Confident

Question 12

The Importance of risks and rewards

Answer 12

Risks
Financial
Esteem
Commitment

Rewards
Profit motive
Being own boss
Self actualisation

Question 13

Motives of an entrepreneur

Answer 13

•Escape boring job
• Pursue an interest or hobby
• Exploit a gap in the market
• To gain a profit
• To be their own boss
• To use redundancy money

Question 14

Opportunity Cost

Answer 14

• Opportunity cost is ‘the cost of the next best alternative that has been given up.’

Question 15

How important are entrepreneurs and SME’s? Why?

Answer 15

• Create new businesses - new goods/services, job opportunities…….
• Add to national income – tax, spending power
• Create social change – innovation and the improvement in the quality of life
• Help communities to develop
– investment in communities/charities

Question 16

HOW IMPORTANT ARE SME’S TO THE UK ECONOMY?

Answer 16

•Small businesses accounted for 99.3% of all private sector businesses at the start of 2017 and 99.9% were small or medium-sized (SMEs).
• Total employment in SMEs was 16.1million; 60% of all private sector employment in the UK.
• The combined annual turnover of SMEs was £1.9 trillion, 51% of all private sector turnover in the UK.

Question 17

Importance of SME’s to the Welsh
and UK economy

Answer 17

Primary sector: the industries engaged in production or extraction of natural resources such as crops, oils and ores.
Secondary sector: The proportion of an economy that includes light and heavy industrial manufacturers of finished goods and products from raw materials.
Tertiary sector: The part of a country’s economy that is connected with providing services rather than producing goods.