Theme 1: Topic 1.1 - Enterprise and Entrepreneurship

Question 1

What are the purposes of business activity?

Answer 1

Provide people with a good or a service
Meet customer needs
Add value to an existing product

Question 2

How can a business add value to an existing product?

Answer 2

By making a product more convenient
By building a good brand image for a product (eg. Designer Clothes)
By improving the products design or quality
By providing a USP

Question 3

Give ways in which new business ideas happen?

Answer 3

Changes in technology
Changes in what customers want
Changes in the business ecosytem

Question 4

How does change in business ecosystem birth new ideas?

Answer 4

Because a business may be unable to survive leading to a need to make new ideas

Question 5

What can new business ideas be?

Answer 5

Original or adapted

Question 6

What do entrepreneurs take advantage of?

Answer 6

Business opportunities

Question 7

Define entrepreneur

Answer 7

Someone who takes risks of entreprise activity

Question 8

To successfully run a new business, what must an entrepreneur do?

Answer 8

Take risks
Organise resources
Make business decisions

Question 9

What are the risks of running a business?

Answer 9

Money loss
Quality of life loss
Money, time and effort spent

Question 10

What are the rewards of running a business?

Answer 10

Their idea became a success
Profit
Quality of life improvement
Independence

Question 11

How can risk be reduced?

Answer 11

Market research
By producing a plan
Maintain competitiveness
Raise enough finance

Question 12

What makes businesses more risky than others?

Answer 12

Seasonal demand (eg. Ice Cream in winter)
A small market
A highly competitive market
An owner who knows little about the product or market

Question 13

Sonia Fletcher set up as a sole trade selling cakes made from organic ingredients
Which one of the following is an example of a risk for Sonia’s business?
Select one answer
A - Sonia has estimated that demand will rise over the next six months
B - Sonia has calculated a negative cash flow for August
C - Sonia is anticipating that the cost of flour will fall next year
D - Sonia has estimated that she will need to work an extra 5 hours per week to meet demand for her products

Answer 13

B - Sonia has calculated a negative cash flow for August

Question 14

What is a business?

Answer 14

A person or organization with the purpose of producing goods and services to meet the needs of customers.

Question 15

What do suppliers do?

Answer 15

Sell products to another business

Question 16

Who do businesses buy off?

Answer 16

Suppliers

Question 17

Who do businesses sell to?

Answer 17

Customers

Question 18

What is the purpose of all products and services?

Answer 18

To meet the needs of customers

Question 19

What is adding value?

Answer 19

A business adding value to its product

Question 20

How do businesses add value?

Answer 20

More convenience
USP
Better design
Improved quality
Branding
Greater speed of service

Question 21

Which two of the following might be the best ways in which an oven-cleaning business could add value to its products?
Select two answers:
A - Employing an accountant to manage cash flow
B - Offering free after-care visits to check customer satisfaction
C - Making sure they have an excellent relationship with the bank
D - Buying a van with the name of the company clearly written on the side
E - Providing a weekend service so that customers do not need time off work

Answer 21

B - Offering free after-care visits to check customer satisfaction
E - Providing a weekend service so that customers do not need time off work