Topic 1.1 Enterprise And Entrepreneurship Flashcards
What is a Business
A business is an organisation that makes goods or supplies
Business Enterprise
A person spotting a business opportunity and setting up a business
Dynamic Nature of Business
The idea that business is ever-changing because external factors, such as technology, are always changing
Venture capital
Risk capital provided by an investor willing to take a risk in return for a share in any later profit
The venture capital provided will take a share stake in the business
Franchisor
Sells the franchise
Franchisor: Advantages and Disadvantages
Advantages - they can grow fast and the franchisee pays for much of their growth
Disadvantages - they have less control and have to share the profits
Franchisee
Buys the franchise
Franchisee: Advantages and Disadvantages
Advantages: they get to run an established brand with access to training and marketing
Disadvantages: they have to share profits and cannot make many of their own decisions
Why do new bsuiness ideas come about (3 reasons)
Changes in technology
Changes in consumer wants
Products and services becoming obsolete
How do new business ideas come about
Original ideas
Adapting existing products/services/ideas
Obsolete
A product that is out of date and no longer used
3 examples of risk
Business failure
Financial loss
Lack of security
3 examples of reward
Business success
Profit and wealth
Independence
What is the difference between goods and services
Goods are tangible (can touch)
Services are intangible
What are needs and wants
Needs - have to have to survive
Wants - would like to have to enjoy
What is the role of business enterprise and the purpose of business activity
To produce goods and services
To meet customer needs
To add value
What is the role of entrepreneurship
Organise resources
Make business decisions
Take risks
What is adding value
Selling price - cost of materials
(The difference between the cost of materials and the selling price)
How to add value
By increasing price
Or
Cutting the cost
Ways to add value
Convenience
Design
Quality
Brand
Unique selling point (USP)
