enterprise Flashcards
what is an enterprise
means having the skill and taking the initiative and the risk to make a business happen
- another word for a business
SME’s - definition ( small medium enterprise )
small turnover - less than £50m
fewer than 250 employees
medium - 50-259 employees
small - 10-49 employees
micro - 0-9 employees
what does needs and wants mean
needs - people require to survive eg food , clothing
wants - people desire eg clothes , technology
where are business opportunities found
- when a market has not been target or a product can be approved on
- through looking or listening to complaints
- through the internet
what is the role of an entrepreneur
financial and no financial motives of entrepreneurs
- start and run a business
- employ people
- make a product or provide a service
- pay taxes
financial :
earn an income and to make a profit
non-financial:
turn a hobby into a business
be their own boss
have identified a gap in the market
few job opportunities and the availability of government grants
importance of entrepreneurs and SME to the primary , secondary and tertiary sectors
entrepreneurs are innovators and bring new ideas to the market and drive the development of new technologies
help the economy by creating new jobs
help boast the economy by providing new products which people can buy - more money spent economy grows
government benefits for taxes
sectors of the economy
primary - industries extract raw materials
secondary - process and manufacture products from raw materials
tertiary - industries provide a service
impact of entrepreneurs and smes on business and the economy
advantages -
creates jobs
pay tax on their profits and their employees pay tax on wages - government can pay for things like hospitals etc
introduce new technology and innovation to the market
dis -
SME small scale and more likely to fail in times of recession and hardship
smaller budgets - don’t have funds to compete with larger organisations to put into research and development ( r&d )
don’t have economies of scale ( saving made by larger businesses through eg bulk buying )
various stakeholders
shareholders , mangers and directors , employees , customers , suppliers , government , local communities
what is a business plan
what is included in a business plan
a statement that outline the way in which a business will attempt to achieve its objectives - giving a clear idea of operations and direction
overview or executive summary- clearly describe the business idea
marketing plan - includes market research carried out and a description of pricing strategies
operations plan - details of where the business will be located, production methods and equipment needed
human resources - the number of employees and the skills , experience required
financial plan - all the financials of the business
importance of a business plan
advantages - presents the business owners with a clear set of instructions on how to run a business
check progress against objectives and take action when objects are not met
needed for potential investors or when seeking finance from banks
disadvantages - inaccurate with unachievable objectives can give entrepreneurs false hope leading to failed investment
harder to predict sales and costs accurately for specific markets
time consuming
no guarantee success
main sources of information and guidance
the government
business support charities , banks and businesses finances , venture capitalists & investors
market definition
competition definition
market is a place where buyers and sellers meet to exchange goods and services
competition - number of businesses in a market
types of markets
local - selling goods and services in a specific area
global - selling goods and services overseas / worldwide - spreads risk / better economies of scale but consider differences between countries
mass market - business sells to the whole market and markets the products to customers in the same way
ads - more potential sales , large scale production and economies of scale , more customers to target
dis - more competition , harder to personalise product ,
niche market - business targets a small segment of the overall market that have specific needs and wants
ads - higher price can be charged , build stronger customer loyalty , lower levels of competition
dis - potential lower profits
if become successful could be targeted by a bigger market , changing customer tastes
trade markets - businesses sell goods to other businesses ( B2B - business to business )
customer markets - made up of the general public who purchase the product for their own consumption
product markets - for physical tangible products / services markets - marketing of services
seasonal - many markets have large seasonable variations eg ice cream
market size
market size - total number of sales by value or volume in market as a whole
market share - sales of one product / total market sales x 100
market trends definition
market segmentation definition
market trends - businesses need to examine what is happening in the market over time
market segmentation - processes of subdividing a market into identifiable segments or subgroups having similar needs , wants or characteristics and providing them with good or services to meet their needs and wants
ways markets are segmented
importance of segmentation to a business and it customers
demographic - age , social class , gender
psychographic - targeting of groups on personality and emotionally based behaviour
geographic - regions of the country - rural , urban
importance :
positives - can better meet customers needs leading to increased loyalty
