Nature of Business: 1.1 Enterprise and entrepreneurship Flashcards
Sector
A part of the economy that provides specific goods or services e.g. Education
Primary sector
Raw materials or natural resources e.g. Oil
Secondary sector
Manufactured goods - things that are made
Tertiary sector
Services that are offered
Factors of Production
What is needed to produce products
Factors of Production - Land
All natural resources, renewable and non-renewable. e.g. Coal, Wood, Animals and Mines
Factors of Production - Labour
Work done by people to produce goods and services
Factors of Production - Capital
Things that are made to enable production. e.g. Factories, machines and schools
Factors of Production - Enterprise
Entrepreneurs who take risks to produce things using the other factors of production
Opportunity Cost
The benefit of a course of action which is lost when you decide to do something else
Objectives
The specific goals set by a business to reach its aims
Characteristics of an Entrepreneur
Motivated, willing to take Risks, organised and innovative
Objectives of an Entrepreneur
Financial reward, independence, to fulfill a need for goods or services or have an interest in the area of business
The Business Environment
All the factors, both internal and external that affect a business
Raw Materials
Unprocessed resources from land
Specialisation
Concentrating on providing one good or service
Resources
Things that are used to produce goods and services
Business
Provides goods or services to customers
Enterprise
A business or the motivation to start one
Entrepreneur
A person who sets up a business and takes on risk
Goods
Physical product given to customers in exchange for payment
Services
Doing something for a customer in exchange for payment
Customer
A person who buys goods or services
Consumer
A person who uses goods and services
Cash
Money in its physical form
Assets
Things that a business owns
Profit
Total revenue minus total costs = positive amount
Loss
Total revenue minus total costs = negative amount
Accounts
The records of the financial activity of a business
Investment
Putting money into a business
Debt
Money that a business owes
Business plan
A document outlining how a business is going to start and operate
Wants
Things that people would like to have
Needs
Things that people must have to live
Risks
Dangers or potential losses
Value
What something is worth in money
