the role of business enterprise

Question 1

Purpose – to produce goods
and services

Answer 1

Land – somewhere to produce the goods e.g. a farm.
Labour – people to work in the business e.g. farm
workers.
Capital – money to get the business started.
Enterprise – This is the drive or motivation from the
owners to start a business.

Question 2

Purpose – to meet
customer needs

Answer 2

Fast, efficient and accurate service.
High quality products at a competitive price.
Friendly, helpful service staff to provide information and answer questions.
Prompt responses to their inquiries, whether online, by phone or in person.
Sufficient stock to meet their needs without long waits.
A trained staff that can handle their questions without referring them on
A clean shop or easy to navigate website

Question 3

Purpose – to add value

Answer 3

Added value – the difference between what a business pays its suppliers, and the price it is able to charge for its product or service

Question 4

An entrepreneur – organizes
resources

Answer 4

Enterprise is about
taking risks, being
creative and innovative
and using your initiative.

An entrepreneur
develops a business
idea and then hires and
organizes the factors of
production to carry out
the business activity.

Question 5

An entrepreneur – takes risks

Answer 5

Risk taking – Setting up a
business is risky, money has
to be paid out in advance to
buy materials, equipment
and wages.
There is no guarantee that
the final product or service
will be sold.
The entrepreneur bears all
cost of the business fails.
If an entrepreneur gives up a
regular job they will also lose
that income and have to
depend on the business to
pay their bills.