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Section 1 -Business > Lesson 3 - Enterprise, Business and growth > Flashcards

Lesson 3 - Enterprise, Business and growth Flashcards

1
Q

Define an Entrepreneur

A

An Entrepreneur is a person who operates, manages and takes risk to make the business better.

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2
Q

List the 8 Characteristics of Entrepreneurs.

A
  1. Hard working
  2. Effective Communicators
  3. Risk takers
  4. Optimistic
  5. Innovative
  6. Independent
  7. Creative
  8. Self-Confident
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3
Q

List 2 Benefits of being an entrepreneur.

A
  1. Can put own ideas into practice

2. May become famous and successful if the business grows.

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4
Q

List 2 Disadvantages of being an entrepreneur.

A
  1. Opportunity cost - Lost income from not being an employee if another business
  2. Lack of knowledge and experience in starting and operating a business.
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5
Q

Define a Business Plan

A

A Business Plan is a Business document which contains the objectives of the business and Important details about Operations, Finance and Owners.

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6
Q

List 2 Ways on how a Business Plan assists entrepreneurs.

A
  1. It helps the business gain finance since Banks ask for a business plan in order to decide whether or not to give the business a loan.
  2. It reduces the risk of the business failing since it forces the entrepreneur to think ahead.
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7
Q

List 3 reasons on why government supports new business.

A
  1. Increased Output - New businesses increase the total output and this benefits the economy
  2. Reduce Unemployment - New businesses created new jobs
  3. Can grow further - Businesses can grow big and then support the government by tax revenue
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8
Q

List 3 different ways government support new businesses.

A
  1. Government orgnaizes support sessions offered by experienced business owners to new entrepreneurs.
  2. Government offers loans at low rates and grants to businesses opening up in depressed areas of low employment
  3. Government sets up Enterprise zones which offer cheap premises to new businesses
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9
Q

List 4 methods of measuring business sizes and their limitations

A
  1. Value sales - Different businesses sell different products.
  2. Value of output - High level of output doesnt mean business is big
  3. Number of Employees - Some businesses employ few people but produce high value output
  4. Value of capital employed - Some companies may use cheap labor
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10
Q

Define capital employed

A

Capital employed is the total value of capital used in the business.

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11
Q

List 3 reasons why owners may want the business to expand

A
  1. Higher status and prestige for the owners.
  2. Business can benefit from economies of scale
  3. Larger share of its market - Bigger businesses attract consumers.
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12
Q

Define Internal Growth

A

Internal growth occurs when a business expands its existing operations.

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13
Q

Define External Growth

A

External growth is when a business takes over or merges with another business.

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14
Q

Define Horizontal Integration

A

Is when a firm takes over or merges with a firm in the same industry

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15
Q

Define Vertical Integration

A

Is when a firm Takes over or merges with a firm in the same Industry but different stage of Production.

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16
Q

Define Conglomerate Merger

A

Firm takes over or merges with a firm in another Industry. This is also known as Diversification.

17
Q

List 3 benefits of Horizontal Integration

A
  1. Business can now benefit from Economies of Scale
  2. Business now has a larger share of its market.
  3. The Business has now reduced its number of competitors
18
Q

List 3 Benefits of Forward Vertical Integration

A
  1. Merger gives an assured outlet for their products.
  2. Profit margin made by retailer is absorbed by the expanding business.
  3. Retailer could be prevented from selling Competitors products
19
Q

List 3 Benefits of Backwards Vertical Integration

A
  1. Manufacturer can be banned from selling to competitor retailers.
  2. Assured supply of Important Components.
  3. Profit made by supplier is absorbed by expanding business.
20
Q

List 3 Problems of Business growth and how to overcome them

A
  1. Over Expansion - Expand slowly and use profit from expansion to fund further expansion.
  2. Poor communication - Operate business in small units and use the lasted IT equipment.
  3. Larger business is difficult to control - Operate business in small units.
21
Q

List 3 reasons why some businesses stay small.

A
  1. Owner’s objectives
  2. Size of Market - Total Number of employees
  3. Type of Industry - Businesses offering personal services are likely to stay small
22
Q

List 3 reasons why businesses fail

A
  1. Poor management - Lack of experience can lead to poor decisions such as locating in area of high cost and low demand
  2. Failure to plan for change
  3. Risks of new businesses - Businesses fail due to lack of financial and other resources, poor planing. Owners of newer businesses may lac

Section 1 -Business (5 decks)

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