enterprise and entrepreneurship

Question 1

entrepreneur 1.1.1

Answer 1

people willing to take risks to start up a business

Question 2

reasons WHY new business ideas come about 1.1.1

Answer 2

> changes in what customers want<

• entrepreneurs need to create business ideas to satisfy new demand.
• they need to listen to what customers want, and how their needs change due to lifestyle.
• keep existing customers & attract new ones.
• they can engage with customers on social media including online reviews e.g. trip advisor

       >products and services become obsolete<

• examples= DVDs and flared jeans
• technology like downloading films and music can make products such as CDs and DVDs less popular
• changes in fashion can also lead to a product becoming obsolete or in less demand

                     >advances in technology<

• changes in e-commerce and m-commerce mean changing opportunities for businesses
• businesses like amazon and E-Bay make online purchasing easier, cheaper & faster. they have no nead to pay rent & other costs of running a shop when selling online

Question 3

HOW new business ideas come about 1.1.1

Answer 3

> adapting an existing product or service to keep up with changing trends
-less risky
-the business could change their brand name
-respond to new fashion by offering different coloured products
adapting existing products could cut development costs -and speed up the launching of the new product

> creating a completely original product or service

• satisfy a new or previously unknown customer
• can be difficult

Question 4

risks of starting up a business 1.1.2

Answer 4

> business failure
-cash flow problems= not enough to pay wages/suppliers
-cash flow problems can also be caused by unexpected
drop in sales therefore sales revenue
financial loss
-caused by the entrepreneur not making back the money
that they invested.
- a poor reputation can affect the ability to raise money in
the future
lack of security
-the entrepreneur does not have the security to work for
someone else
-using your own money to set up a business leads to
financial insecurity as you may have run out of money.

Question 5

rewards of starting up a business 1.1.2

Answer 5

> business success
-starting from nothing and building up to something
successful= rewarding
-having an idea that no one has thought of before =
rewarding
profit
-making money= rewarding
independence
-not having to work for someone else and being able to
make your own decisions= rewarding
-taking risks that others may not agree to= rewarding

Question 6

3 categories for the role of business enterprise 1.1.3

Answer 6

> producing goods or services
-more g/s that satisfy customers= more competition
-making and selling leads to high profits that are invested
leading to further growth, creating more jobs & wealth
meeting customer needs
-offering people exactly what they want and
understanding their changing needs
these include:
-fast delivery -reasonable prices -helpful customer service
-prompt answers to enquiries -enough stock available
adding value
value can be added on many ways:
-branding-customers more attracted to a brand= pay more
-convenience- easy to access, always available
-quality-having a good reputation
-USP-having something unique abt the business
-design: well designed product= charge a higher price

Question 7

entrepreneurs must…

Answer 7

1) organising resources e.g. finance, machinery
2) making business decision e.g. solve any problems
3) taking risks e.g. financial risk taking