Topic 1.1 Enterprise And Entrepreneurship Flashcards
How to add value?
- Convenience
- Design
- Quality
- Brand
- USP
What are the roles of an entrepreneur?
- To take risks
- To makes business decisions
- To organise resources
- To show leadership
What changes represents the dynamic nature of business?
Changes in technology, in fashion and in economy. The dynamic nature of business arises because of changing customer tastes and needs
How can new business ideas come about?
- new ideas and competitive advantage
- original ideas
- adapting existing products and services
- changes in what consumers want
- products and services becoming obsolete
- changes in technology
Why do people start a business?
- Desire for something new
- Wishing to be your own boss
- Profit
What are the characteristics of an entrepreneur?
- Risk taker
- Creativity
- Determination
- Confidence
Why new business ideas from changes in customer wants?
Factors that affect demand may be changes in social attitudes, technical breakthroughs and improved standard of living. Price is also a factor because it can’t be too cheap or too expensive.
Why new business ideas from products and services becoming obsolete?
A product becomes obsolete if there is no demand for it, so business need to think how customer habits change and keep coming up with new, innovative business ideas.
Why new business ideas from changes in technology?
The two main impacts are that it creates opportunities for new things and it increases the likelihood of old things going obsolete.
What are the risks of starting a business?
- Business failure
- Financial loss
- Lack of security
What is the risk of lack of financial security?
You don’t have the security of a regular wage/salary to cover responsibilities like mortgage/rent.
What is the risk of financial loss?
Businesses are unlikely to make a profit on the first 3 years so the owners should avoid putting money into the business that they cannot afford to lose
What is the risk of business failure?
It’s a business that is unable to make sufficient profit (or funds) to cover costs
What are the main risks at the start of a businesses life?
- Identifying a gap in the market big enough to be profitable
- Raising enough capital
- Getting the right people to work in the right way
- Building a base of initial customers
What are the main risks in the early days of a businesses life?
- Making sure your initial customers come back for more
- Running out of cash during the off-season
- Running out of energy and self-belief when times are tough
- Coping with competition when it arrives
What are the main risks when growth is rapid in a businesses life?
- Over trading (sales growing faster than you can copy financially
- Struggling to manage rapid rises in staff especially middle management
- The entrepreneur owner may struggle to be a good manager
- The boss and staff a become complacent, so the rise leads to the fall
What are the rewards of starting a business?
- Business success
- Independence
- Profit and wealth
How can risks be minimised?
- Planning
- Monitoring
- Insurance
What is business success?
The buzz and excitement of being an entrepreneur
What is profit and wealth?
Entrepreneurs earn wealth from their business through profits or selling successful businesses
What is independence?
The ability to be your own boss and make own decisions
What is the role of a business?
- To provide goods and services
- Meeting customer needs and wants
- To add value
What are goods?
Goods are tangible (can be touched) and can be grown or manufactured
What is a service?
Services are invisible and intangible
