Enterprise Flashcards
WHY DO PEOPLE START THEIR
OWN BUSINESS?
- to gain a profit
- to turn a hobby or pastime into a business
- to use redundancy money and provide
themselves with employment - to be their own boss.
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. The business
world does not stay still – new opportunities are
constantly arising. An entrepreneur with an idea,
commitment, funds and a little luck can succeed
even in the most competitive of markets.
ENTREPRENEUR
Definition: An entrepreneur is someone who
starts and runs a business. Perhaps they make
a product and then sell that product, or perhaps
they provide a service. They quite possibly
employ people and, of course, try to make a
profit.
CHARACTERISTICS OF AN
ENTREPRENEUR
being a risk taker – they risk capital
* product knowledge
* be hard working
* be passionate/determined/ambitious and
have perseverance – new businesses have
low success rates
NEEDS
People have a limited number of needs that
must be satisfied if they are to survive. These
would include physical needs such as a minimum
amount of food, water, shelter and clothing and
psychological and emotional needs, e.g. selfesteem and love
Wants
Wants are unlimited (infinite) people constantly
aim for a better quality of life. For example,
better/more food, better housing, longer
holidays, better education, entertainment – in
effect any example that is not a basic need.
IMPORTANCE OF THE ENTREPRENEUR
TO THE SUCCESS OF THE ECONOMY
- 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. - Many entrepreneurs are innovators. They
bring new ideas to the market and drive the
development of new technologies. James
Dyson, of Dyson vacuum cleaner fame is a
classic example of an entrepreneur, bringing a
range of new products to the market. - Entrepreneurs are important because they
are innovative, they can provide better ways
of doing things and can also lead to new
business, thus increasing profit for businesses
and their stakeholders. - Entrepreneurs have the vision and the
willingness to take risks which drive business
forward. - Entrepreneurs help the economy by creating
new jobs. - Help to boost the economy by providing new
products. - Without entrepreneurs, our economy would
not benefit from the boost they give from
added business and ideas and wealth creation. - Increasing exports – helps balance of
payments. - Government benefiting from taxation that is
generated from the revenues of the business.
Primary sector
extractive – produces raw materials, e.g. iron ore (that goes into making steel) and oil (that makes
petrol, plastics, etc.), as well as producing final products like fish and oranges.
Secondary sector
manufacturing and construction industries make, build and assemble products.
Tertiary sector
services give value to people but are not physical goods.
Services are sometimes classified as direct services (to people),
e.g. the police, hairdressing, etc. and commercial services
(to business), e.g. business insurance, financial services, etc.
The importance of the primary sector in the uk
In some rural areas e.g. West and mid Wales, Scottish Highlands the primary sector is crucial to the
local economy. We also still get a great deal of food from the UK agricultural industry, even though
numbers employed are very small.
the importance of the secondary sector in the uk
Many entrepreneurs believe that that manufacturing in the secondary sector creates wealth when
compared to the service sector. However, the secondary sector in the UK and the manufacturing
sector in particular have rapidly declined due in part to competition from cheap foreign imports from
developing countries. They cannot compete with low labour costs in China and India.
The importance of the tertiary sector in the uk
- In terms of employment, the tertiary sector is by far the most important in the UK employing
approximately 80% of those who are in employment. The secondary sector accounts for 18%, with 2%
in the primary sector. A similar picture emerges if we look at the contribution each sector makes to the
value of our output (GDP).
RISE/DECLINE IN
EMPLOYMENT PRIMARY SECTORS
Primary: Declined as raw materials have run out
and are now found elsewhere in the world.
Decline in secondary employment:
- De-industrialisation – decline in once
prosperous industries such as shipbuilding,
steel, textiles and car manufacturing. - Changes in consumer demand in favour
of foreign goods – better quality products
from countries like Japan, Korea, etc. at very
competitive prices/better quality/reliability/
innovation. - Lack of competitiveness of UK
manufacturing firms in world markets/
increasing overseas competition. - Lack of investment in manufacturing both by
government and industry. - Technology has replaced workers.
- Trade union problems can cause markets to be
lost to foreign competition. - Relocation of UK manufacturers abroad due
to lower costs. - Education system not producing as many
graduates, e.g. engineers who are able to work
in manufacturing – manufacturing has become
‘unfashionable’.
