enterprise, business growth and size

Question 1

characteristics of entrepreneur

Answer 1

• innovative/creative: come up with new ideas
• self confident: strong belief in your abilities and ideas
• risk taker: take measured risks
• determined: does not give up easily and is hard working
• result driven: wants to achieve results
• leader: depend on yourself while including others
• multitalented/independent: should be able to perform many tasks on your own
• initiative: able to develop good business plan to achieve business objectives
• good communicator/networker: good relationship with your stakeholders

Question 2

advantages of being an entrepreneur

Answer 2

• independence: able to choose how to use time and money
• may become rich/successful/famous if business grows
• makes use of personal interests and skills

Question 3

disadvantages of being an entrepreneur

Answer 3

• may fail without proper planning or with wrong decisions
• lack of knowledge and experience while operating a business
• have to put their own money

Question 4

why do governments support entrepreneurs

Answer 4

• increase in employment as create jobs
• more taxes paid to government
• if business becomes famous so does country
• tourism for business increases taxes and GDP
• more choices to people and more competition encourages creativity
• increased quality products
• helps keeps prices stable

Question 5

how do governments support entrepreneurs

Answer 5

• tax holidays so no tax for large periods of time
• special enterprise zones where premises are sold at a very low rate
• training and up skilling provided
• research centres
• finance like money provided at a low interest rate

Question 6

what does a business plan entail

Answer 6

• name
• type of business organisation
• forecast profit
• objectives of the business
• market
• advertising and promotion
• expansion plans
• executive summary

Question 7

what does a business plan entail

Answer 7

• name
• type of business organisation
• forecast profit
• objectives of the business
• market
• advertising and promotion
• expansion plans
• executive summary

Question 8

why is a business plan important

Answer 8

• helps persuade banks to loan money
• provides targets and goals
• acts as a checklist to monitor progress
• careful planning reduces risk

Question 9

who wants to measure business size

Answer 9

• government
• investors
• banks
• workers
• competitors

Question 10

why do businesses want to grow

Answer 10

• increase market share
• earn higher profit
• achieve better status
• get economies of scale

Question 11

how to measure the size of a business

Answer 11

• value of labour employed
• value of capital employed
• value of sales
• value of output
• market share

Question 12

limitations of different ways of measuring business size

Answer 12

• some firms may be capital intensive
• some firms may be labour intensive
• is not high other ways
• producing more may not mean selling more
• is not high other ways

Question 13

ways of internal growth

Answer 13

• developing new products
• opening a new branch paid for by profits from existing business
• finding a new market for products
• increasing output

Question 14

ways of external growth

Answer 14

• merger
• take over

Question 15

advantages of horizontal integration

Answer 15

• reduces competition
• economies of scale
• higher market share

Question 16

advantages of forward vertical integration

Answer 16

• assured retail outlet
• increased profits
• retailer can be prevented from selling competitors products

Question 17

advantages of backward vertical integration

Answer 17

• assured supply of raw materials
• higher profits
• prevent supply to competitive firms

Question 18

advantages of conglomerate integration

Answer 18

• diversification
• spreading of risks
• sharing of ideas
• higher profits

Question 19

why some businesses remain small

Answer 19

• type of industry: personal services
• market size: small market
• owners objectives: may want to retain control
• finance: owners lack money or expertise
• risk appetite: may not be willing to take risks
• communication management: may be conflicted in their communication

Question 20

why some businesses fail

Answer 20

• poor management: lack of experience can lead to bad management decisions
• bad cash management: expenses more than incomes as cannot forecast cash flows so cannot pay bills
• poor planning: failure to plan for changes in markets or technologies
• over ambitious: over expansion becomes difficult to handle
• poor choices: location, product etc. unsuitable
• advertising: poor marketing