Theme 1: Topic 1.1 - Enterprise and Entrepreneurship Flashcards
What are the purposes of business activity?
Provide people with a good or a service
Meet customer needs
Add value to an existing product
How can a business add value to an existing product?
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
Give ways in which new business ideas happen?
Changes in technology
Changes in what customers want
Changes in the business ecosytem
How does change in business ecosystem birth new ideas?
Because a business may be unable to survive leading to a need to make new ideas
What can new business ideas be?
Original or adapted
What do entrepreneurs take advantage of?
Business opportunities
Define entrepreneur
Someone who takes risks of entreprise activity
To successfully run a new business, what must an entrepreneur do?
Take risks
Organise resources
Make business decisions
What are the risks of running a business?
Money loss
Quality of life loss
Money, time and effort spent
What are the rewards of running a business?
Their idea became a success
Profit
Quality of life improvement
Independence
How can risk be reduced?
Market research
By producing a plan
Maintain competitiveness
Raise enough finance
What makes businesses more risky than others?
Seasonal demand (eg. Ice Cream in winter)
A small market
A highly competitive market
An owner who knows little about the product or market
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
B - Sonia has calculated a negative cash flow for August
What is a business?
A person or organization with the purpose of producing goods and services to meet the needs of customers.
What do suppliers do?
Sell products to another business
Who do businesses buy off?
Suppliers
Who do businesses sell to?
Customers
What is the purpose of all products and services?
To meet the needs of customers
What is adding value?
A business adding value to its product
How do businesses add value?
More convenience USP Better design Improved quality Branding Greater speed of service
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
B - Offering free after-care visits to check customer satisfaction
E - Providing a weekend service so that customers do not need time off work
