enterprise and business planning

Question 1

what happens in the primary sector?

Answer 1

extraction- provides natural resources such as the food we need, farming and supplying the power we use.

Question 2

what happens in the secondary sector?

Answer 2

manufacturing- private enterprises provide us with consumer goods; manufacturing cars, processing food ect..

Question 3

what happens in the tertiary sector?

Answer 3

service- private companies: provide gyms, offering financial advice ect.

Question 4

what are the 3 advantages of operating in more than one sector?

Answer 4

1. the risk is spread- if one sector collapses the business can rely on the other
2. the business can have everything at cost price without having to pay silly prices or additional fees
3. more control of how many, where and when

Question 5

what is a sole proprietor

Answer 5

someone who owns and operates a business alone

Question 6

what is a partnership?

Answer 6

a business ran by 2-20 people

Question 7

what is a limited company?

Answer 7

a business that is owned by shareholders who have limited liability

Question 8

what does SME’s stand for?

Answer 8

small and medium sized enterprises

Question 9

how big is a small enterprise?

how big is a medium enterprise?

Answer 9

-0-49 employees
-up to 250 employees

Question 10

how many people do SME’s have employed?

what is the combined turnover of SME’s?

Answer 10

-14.4 M
-£1600 B

Question 11

what are the 5 motives of an entrepreneur?

Answer 11

1. to turn a hobby or pastime into a business- satisficing
2. to gain a profit - make more money than current job
3. to use redundancy money- setting up business is only outcome

4.To be their own boss- in control of their own destiny

5. carry on family tradition- already have skills and expertise

Question 12

what are the key characteristics of an entrepreneur? (6)

Answer 12

• being a risk taker (risk capital and own time to create profits)
• taking initiative and being proactive (don’t panic or get overwhelmed)

-effective organiser (undertake a wide range of activities)

-having creativity and being innovative
(come up with innovative concepts and ideas)

-being hard working (entrepreneurs work 52 hours a week estimated)

-being determined and having perseverance

Question 13

how should entrepreneurs identify business opportunities (4)

Answer 13

• find a product or service that is not available in the area

-change a product or service they are unhappy with

-see if they can support other businesses

-developing a brand new product or service

Question 14

what are the roles of an entrepreneur?
(9)

Answer 14

• set up and leading a business

-organisation, management , planning of the business

-risk taking

-decision making (finance, employment)

-acting as an innovator(bringing new products to the table)

-create employment

-securing finance (raising money internally and externally)

-formulate business plan

undertake market research

Question 15

what are the skills of an entrepreneur?

Answer 15

-communication
-numeracy
-confidence
-organisation skills

Question 16

what do entrepreneurs bring to the economy?

Answer 16

-wealth to an area
-provide jobs
-innovation
-attract other entrepreneurs

Question 17

why are SME’s important?
(6)

Answer 17

-create jobs

-creates demand for product which in turn creates more jobs and other businesses

-generates wealth in the economy (SMEs buy G&S from other businesses

-pay taxes to government

• introduced new tech and innovation to the market

-stimulates economy by instilling confidence in people. (consumer confidence means more investments)

Question 18

what are the disadvantages of SMEs?
(4)

Answer 18

-small scale businesses are more likely to fall in recession and hardship

-funds don’t compete with larger organisations because they have smaller budgets (can’t invest as much money so affects ability to offer high quality services)

-less recognition so harder to compete with others

-don’t obtain economies of a similar scale to larger businesses

Question 19

what is a need? give examples

Answer 19

-essentials for survival
-food, water, shelter, clothing,

Question 20

what is a want? give examples

Answer 20

-desires that aren’t essential
-designer clothes, latest iphone

Question 21

what is a service? give examples

Answer 21

-something that is intangible
-hairdressers, plumbing

Question 22

what is a good? give examples

Answer 22

-physical items that are tangible
-crisps, ball

Question 23

where can entrepreneurs find help when wanting to start up a new business?

Answer 23

-surveys
- data
-books
-articles

Question 24

what is a business plan?

Answer 24

-a business plan makes clear the objectives of the business and how the business intends to achieve these objectives

• business plans are ongoing

Question 25

what are the 5 main components of a business plan?

Answer 25

• overview/ executive summary
• marketing plan
• operations plan
• human resources plan
• financial plan

Question 26

outline the purpose of the overview/ executive summary portion of a business plan.
(6)

Answer 26

• clearly describes business idea
• briefly describes the business opportunity that is going to be exploited
• outlines strategies and how finance is going to be obtained
• sets out overall aims and objectives
• should be flexible and adaptable

Question 27

outline the purpose of the marketing plan within a business plan
(3)

Answer 27

• establishes the possible size of the market, needs of customers and the level of competition based off field and desk research
• after marketing plan the strategy can be prepared.
• identifies weaknesses so businesses can better meet customers needs and differentiate from competition

Question 28

outline the function of the operations plan within a business plan
(5)

Answer 28

contains details of
• where the business is operated
•production methods
• equipment needed
•information on the costs of production
• where the business supplies

Question 29

outline the function of the human resources plan within a business plan

Answer 29

identifies:
•the number of employees
• experience and qualifications they require
•management team

Question 30

identify the purpose of a financial plan within a business plan
(4)

Answer 30

identifies:
• a sales forecast indication potential revenues
• a cash flow forecast for the first 12 months
• a profit and loss and balance forecast for the end of the first year
• a break even analysis

Question 31

what are the benefits of a business plan?

Answer 31

• businesses are more likely to survive with one
•gives the owner a clear set of instructions on how to run their business
• allows the owner to check progress against objectives, monitor cash flow and take action when objectives aren’t being met
• needed for potential investors when seeking finance from banks, without one it is highly unlikely that capital will be attracted

Question 32

what are the drawbacks of a business plan?
(4)

Answer 32

• market research costs time money and resources that could be better spent elsewhere in the business
• it’s difficult to predict what your income will be for a new business
• market research data maybe unreliable, most new business will be using guesswork which is a weakness
• and inaccurate business plan with unachievable objectives can give entrepreneurs false hope leading to failed investments