Enterprise, business growth and size 1.3 Flashcards
characteristics of successful entrepreneurs
hard working
risk taker
creative
optimistic
self-confident
innovative
independent
purpose and key elements of a business plan:
overview/summary, objectives, resources, market research, marketing, finance, people, operations
the importance of having a business plan
to help you avoid risks, keep everyone on the same page, plan finances, check if your business idea is good, make operations smoother, and adapt to changes.
why governments support business start-ups
to reduce unemployment
to increase competition- gives consumers more choice
to increase output
to benefit society
can grow further
methods of measuring business size
number of people employed
value of output/sales
volume of output/sales
capital employed
(profit is not a method of measuring business size)
how do governments support business start-ups
grants, advice, low-cost loans, training schemes
why would the owners of a business may want to grow the business
possible higher profits
more status for the owners and managers
lower average costs
larger share of the markets
how and why businesses can grow internally
develop new products, develop new markets
how and why businesses can grow externally
mergers and takeovers, including horizontal integration, vertical integration
advantages of methods of growth
increased chances of higher profit
Higher prestige and status for owners + employees
Lower average cost - economies of scale
Increased control of the market - market share
why some businesses remain small
the type of industry the business operates in
the Markey size
the owner s objectives
problems linked to business growth
difficult to control
poor communication
costs a lot more money
reasons why businesses succeed or fail
management skills, availability of finance, suitability of product, demand for products, changes in the economy, level of competition
business plan
document containing the business objectives and important details about the operations, finance and owners of the new business
entrepreneur
a person who organises, operates and takes the risk for a new business venture
different ways a business can grow
internal growth- business expands its existing operations
external growth- a business takes over or merges with another business, which then becomes part of the predator business.
causes of business failure
lack of management skills
changes in the business environment
over expansion
