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Business > Introduction to Business- Enterprise > Flashcards

Introduction to Business- Enterprise Flashcards

1
Q

what is meant by entrepreneur and enterprise?

A

An entrepreneur is someone who organises a business venture, takes a risk and is responsible for the risks involved.

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2
Q

what are the four factors of production?

A

Land, Labour, Enterprise and Capital

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3
Q

What is meant by “land”? (factors of production)

A

natural resources available for production

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4
Q

what is meant by “labour”? (factors of production)

A

the human input into the production process

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5
Q

what is meant by “enterprise”? (factors of production)

A

individuals who organise all other factors of production

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6
Q

what is meant by “capital”? (factors of production)

A

goods used in the supply of other productions of goods and services

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7
Q

risks of entrepreneurship?

A
  • loss of money
  • heavy workload
  • mental health issues
  • time lost
  • no wages until business works
  • missing out on career opportunities
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8
Q

rewards of entrepreneurship?

A
  • profit
  • control of company
  • flexibility
  • own boss
  • decide on wages
  • work from anywhere
  • pride and satisfaction
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9
Q

characteristics of an entrepreneur?

A
  • risk taking
  • organised
  • motivated
  • ambitious
  • independent
  • creative
  • hard working
  • leadership skills
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10
Q

define adding value?

A

additions or improvements to something which makes it worth much more (larger markup)

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11
Q

how can value be added?

A
  • high quality
  • craftsmanship
  • prestige design
  • unique and different
  • convenience
  • branding
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12
Q

why is adding value important?

A
  • allows entrepreneur to make a profit
  • this gives the entrepreneur the incentive to be creative
  • it allows the business to charge a higher price
  • makes you different and better than the competition
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13
Q

three types of business activity?

A
  • primary
  • secondary
  • tertiary
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14
Q

what does primary business activity involve?

A
  • natural resources and raw materials
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15
Q

what does secondary business activity involve?

A

manufacturing raw materials into products

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16
Q

what does tertiary business activity involve?

A

providing a service OR selling and distributing the finished product

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17
Q

what are constraints of a business?

A
  • employee skills
  • finance available
  • legislations
  • competition
  • the economy
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18
Q

define stakeholders?

A

groups or individuals who have an interest in a business

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19
Q

types of stakeholders?

A
  • banks
  • directors
  • suppliers
  • customers
  • shareholders
  • government
  • communities
  • employees
  • the business
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20
Q

what are primary stakeholders?

A

stakeholders that directly deal with the business

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21
Q

what are secondary stakeholders?

A

stakeholders who have an indirect relationship with the business

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22
Q

stakeholder objectives- shareholders

A
  • returns on investments
  • high dividend payments
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23
Q

stakeholder objectives- customers

A
  • pay fair prices for products
  • receive good quality goods/ services
24
Q

stakeholder objectives- employees

A
  • earn fair wages and salaries
  • have a suitable schedule of hours
  • a good working environment
25
Q

stakeholder objectives- government

A
  • receive taxes
  • boost economical activity
  • create jobs
26
Q

stakeholder objectives- suppliers

A
  • supply as much as possible
  • good communication and treatment from businesses
    -receive payments on time
27
Q

stakeholder objectives- banks

A
  • give out loans with high interest rates
28
Q

stakeholder objectives- local community

A
  • ethical businesses
  • supporting and giving to community
  • new job opportunities
29
Q

define the private sector?

A

the part of the national economy that is not under direct state control

30
Q

examples of private sector companies?

A
  • digital media companies
  • accountancy firms
  • hospitality and catering businesses
  • retail and e-commerce
  • manufacturing and construction firms
  • health and beauty services
  • technology and software developers
31
Q

define public sector?

A

the part of the economy composed of both public services and public enterprises (government owned)

32
Q

examples of public sector companies?

A
  • healthcare
  • law enforcement
  • environmental protection
  • justice system
  • broadcasting
  • transport
  • public finance
33
Q

what are third sector organisations?

A

charities and community groups, social enterprises and co-operatives

34
Q

which businesses in the private sector are incorporated?

A
  • private limited company
  • public limited company
  • franchises
35
Q

which businesses in the private sector are unincorporated?

A
  • sole traders
  • partnerships
36
Q

what is a sole trader?

A

an individual owning a business on their own

37
Q

advantages of being a sole trade?

A
  • own boss
  • choose wages
  • complete control
  • flexibility on hours
  • easy to set up
38
Q

disadvantages of being a sole trade?

A
  • unlimited liability
  • no continuity
  • difficulty getting loans
  • workload may be heavy
  • stress and mental health damage
39
Q

what is a partnership?

A

where a business is started and owned by two or more people

40
Q

advantages of being a partnership?

A
  • shared workload
  • more finance sourced
  • more skills inputed
41
Q

disadvantages of being a partnership?

A
  • unlimited liability (unless LLP)
  • shared control
  • shared profit
  • requires Deed of Partnership
  • no continuity
42
Q

what is a limited liability partnership?

A

combined features of a partnership with those of a limited company

43
Q

what is a private limited company (Ltd.)?

A
  • owned by share holders
  • separate legal entity
  • shares sold to close friends and family
  • controlled by board of directors
44
Q

what is a public limited company (PLC)?

A

a company where any member of the public can buy a share on the stock market

45
Q

advantages of being a limited company?

A
  • limited liability
  • easier to raise finance
46
Q

disadvantages of being a limited company?

A
  • greater admin cost
  • public disclosure of company information
47
Q

what is a franchise?

A

a business with well-known brand name lets a person or group of people set up using that brand.

48
Q

why would someone want to be a franchisee?

A

you want to be in the business industry but do not want to take the risk of starting your own business

49
Q

advantages of being a franchisee?

A
  • little to no experience in the industry is needed (all training provided)
  • existing customer base and brand awareness
    -lower risk than starting own business
  • support from franchisor
50
Q

disadvantages of being a franchisee?

A
  • limited creative opportunities
  • investment and start- up costs can be expensive
  • contracts aren’t always permanent
  • financial information shared with franchisor
  • still have to do a lot on your own (find land, research market etc.)
51
Q

what is a multinational corporation (MNC)?

A

a business which operates in many countries

52
Q

advantages of MNCs?

A
  • provide job opportunities
  • can boost the economy
  • production costs can be reduced
  • good quality products
  • growth is high
  • new inventions
  • decrease product prices
53
Q

disadvantages of MNCs?

A
  • sweat-shop labour
  • local companies may be driven to failure
  • increase pollution
  • build legal monopolies
  • import skilled labourers, reduces fair chance on locals
54
Q

what is a co operative

A
  • owned by members
  • ran by it’s members
  • profits are shared among members (not a charity or not for profit organisation)
55
Q

advantages of a co operative

A
  • legally straightforward
  • cheap to set up
  • all involved are working towards the same goal
  • limited liability for members
56
Q

disadvantages of co operatives

A
  • capital may be small
  • lenders may be reluctant to lend
  • weak management is possible
  • large amounts of decision makers

Business (4 decks)

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