Topic 1

Question 1

Definition of enterprise.

Answer 1

To spot an opportunity to start a business that people are willing to buy.

Question 2

Definition of entrepreneur.

Answer 2

Someone who develops a business idea who puts it into practise.

Question 3

Business plan.

Answer 3

A plan in business to achieve an objective without the business going a drift.

Question 4

Advantages of a business plan.

Answer 4

• helps you guide through your first year of business.
• controls finances.
• helps applying for a bank load.
• achieve objectives.

Question 5

Disadvantage of a business plan.

Answer 5

• may be poor quality due to lack of experience.
• it will need to be constantly updated due to change in circumstances.
• takes time and effort.
• new opportunity’s may be missed.

Question 6

Advantages of sole trader.

Answer 6

• decide own working hours.
• you get all profits.
• no boss
• get all credit
• you make all key decisions.

Question 7

Disadvantages of sole trader.

Answer 7

• no advice of other people.
• no guaranteed work or money.
• lots of pressure and responsibilities.
• unlimited liability.

Question 8

Advantages of partnership.

Answer 8

• share setup costs.
• share work ‘n’ stress.
• more input into business as there are more points of view.
• more contacts.

Question 9

Disadvantages of partnerships.

Answer 9

• they could disagree with a decision in the business.
• have to share profits.
• could have a unreliable partner.

Question 10

A deed of partnership.

Answer 10

Lays out the rules for running a partnership business E.G.

• how profits are split.
• working week.
• if one wants to lose.
• who invested what.

Question 11

A sleeping partner.

Answer 11

Someone who invests money into the business for a cut of the profits who has no part in the day to day running.

Question 12

Public limited company. Base info.

Answer 12

• PLC after name.
• shareholders from the public.
• run by managing directors.

Question 13

Public limited company. Advantages,

Answer 13

• good art raising capital.
• good at growth and expansion.
• big profile.
• widens shareholder base.

Question 14

Public limited company’s, disadvantages.

Answer 14

• lack of ownership and control.
• vulnerable for takeovers.
• expensive to set up.
• transparency.

Question 15

Private limited companies.

Answer 15

• LTD after name.
• owners called shareholders.
• usually owned bay families or friends.
• governed by two legal documents.

Question 16

Stakeholder

Answer 16

Anyone who takes interest in the business or who the business effects.

Question 17

Internal stakeholder.

Answer 17

Any stakeholder inside the business.E.G

• staff
• manager

Question 18

External stakeholder.

Answer 18

A stakeholder who is not inside the business, E.G,

• customers
• locals.