Enterprise. business growth and size

Question 1

Entrepreneur

Answer 1

is a person who organizes, operates and takes the risk for a new business venture

Question 2

Pros of being an entrepreneur

Answer 2

• independence - able to choose how to use time and money
• able to put own ideas together
• May become famous and successful if the business grows
• may be profitable and the income might be higher than working at an normal job.
• able to use own skills and interests

Question 3

Cons of being an entrpreneur

Answer 3

• risk - many new businesses fail, if there is poor planning
• capital - have to put your own money into the business and possibly find other sources of capital
• lack of knowledge and experience in starting and operating a business
• opportunity cost - lost income of not being an employee of another business

Question 4

Characteristics of successful entrepreneurs

Answer 4

• hard working
• risk taking
• optimistic
• creative
• innovative
• independent
• effective communicator
• self confident

Question 5

Business Plan

Answer 5

1. Description of the business
2. Products and services
3. The market
4. Business location and how products will reach customers
5. Organization structure and management
6. Financial Info
7. Business Strategy

Question 6

Why government supports new businesses

Answer 6

• To reduce unemployment
• To increase competition
• To increase output
• To benefit society
• Can grow further

Question 7

How does governments support start up businesses

Answer 7

• Business ideas and help (support sessions by experienced businessmen)
• Premises - Low cost premises
• Finance - Loan with low interest rates
• Labor - grant businesses to train employees
• Research (allow businesses to use researches done before)

Question 8

Capital Employed

Answer 8

is the total value of capital used in the business

Question 9

Ways to measure business size

Answer 9

• The umber of people employed
• value of output
• values of sales
• value of capital employed

Question 10

Why expand a business?

Answer 10

• Higher profits for the owner
• More status and salaries to the managers and owners
• Lower average costs
• Larger shares of it’s market

Question 11

Internal growth

Answer 11

Occurs when a business expand it’s existing operations

Question 12

External growth

Answer 12

is when one business buys out the owners of another business. It is often called integration

Question 13

Takeover

Answer 13

is when one business buys out the owner of another business, which then becomes part of the ‘predetor’ business

Question 14

Merger

Answer 14

is when the owners of two businesses agree to join their businesses together to make 1 business

Question 15

Horizontal integration

Answer 15

is when one business merges with or takes over another one in the same industry at the same stage of production.

Question 16

Vertical intergration

Answer 16

is when one business merges with or takes over another one in the same industry but at a different stage of production.

Question 17

Conglomerate integration (diversification)

Answer 17

is when one business takes over or merges with another business in a completely different industry

Question 18

Causes of business failiures

Answer 18

• Lack of management skills
• Changes in the business environment
• Poor financial management
• Over expansion

Question 19

Business Plan

Answer 19

is a document containing the business objectives and important details about the operations, finance and owners of the new business