Enterprise Handout 1

Question 1

define business

Answer 1

an organisation that fulfills a common purpose

Question 2

what is an SME and describe it

Answer 2

small to medium enterprises
small turnover less than 50 million
employ less than 50 or 250
sole traders, partnerships and private limited
make up 99.9% UK business population

Question 3

define entrepreneurs

Answer 3

someone who starts and runs a business by providing a service or product
employ people and try to make a profit

Question 4

identify four business opportunities that entrepreneurs base their product/service on

Answer 4

needs - survival/limited/warmth shelter clothes food etc.
wants - desires/unlimited
goods - physical/durable or non-durable
services - intangible business activities people are prepared to pay/ hairdressers banking leisure activities

Question 5

explain 6 roles of an entrepreneur

Answer 5

setting up and owning business - provides the finance to set up and grow , use their passion to inspire others to commit to business, have strong leadership skills
organisation - setting up machinery, hiring, marketing, financing
risk taking - investing their own money , debt, not guaranteed to be successful , lose money
decision making - finance, employment, marketing
innovator - bring new products , innovative ideas, develop existing products
securing finance - money needed can be raised internally and externally

Question 6

what are 6 motives for an entrepreneur to start a business?

Answer 6

financial reward
lack of employment opportunities
gov. incentives
independence
job satisfaction
working by themselves

Question 7

what are 7 skills and characteristics an entrepreneur needs?

Answer 7

risk taker
taking initiative and being proactive - able to change as needed, don’t panic
understanding of market - make judgements and monitor changes
effective organiser
creativity and innovative
committed
good judge of people

Question 8

what are the 3 sections of the uk economy

Answer 8

primary - extraction and production of raw materials
secondary - transformation of raw materials into goods
tertiary - provision of services

Question 9

give 6 reasons of the importance of entrepreneurs to uk economy

Answer 9

wealth creators - boosting economic growth by boosting demand for new products
job creators
society builders - give something back to society
exports - products sold abroad brings revenue to economy
taxes - sole traders and partnerships will be liable for income tax and companies pay corporation tax
innovators

Question 10

give 4 evaluations of the impact of entrepreneurs to economy

Answer 10

create jobs - people pay tax and spend income on other products, make up 60% of uk private sector jobs and 50% of GDP however SMEs are small scale and likely to fail in recession and hardship
create demand - creates more jobs and businesses, buy products from other businesses to produce finished goods helping to generate wealth locally and nationally however SMEs place smaller order and don’t obtain economies of scale
pay tax - gov. uses this for hospitals schools and police however less recognition and harder to compete with larger businesses and more profits
new technology - encourages exports and investments, innovation, new products and services to market however smaller budgets which may affect SMEs ability to offer high quality solutions