Unit 1 - Creating A Buisiness

Question 1

What is a business?

Answer 1

An organisation which is involved in the production of goods or the provision of services to meet customer and other organisation’s needs and wants

Question 2

What are needs?

Answer 2

The basic products that people require in order to survive.

Eg. Food, drink, shelter, warmth, clothing.

Question 3

What are wants?

Answer 3

Refer to the desire to consume goods and services that are not essential for living.
Peoples wants are unlimited.
Eg. Phone, holiday, cars.

Question 4

How do businesses meet needs and wants?

Answer 4

Producing goods and services

Question 5

What is a consumer?

Answer 5

The person who uses (consumes) a product.

Question 6

What is a customer?

Answer 6

Any person or organisation which buys or is supplied with a product by a business.

Question 7

What is a good?

Answer 7

A physical object that can be purchased

Question 8

What is a service?

Answer 8

A non physical item that can be purchased

Question 9

What are the two groups of goods/services?

Answer 9

Single use - only used once /used up in the production process
Durable - can be used repeatedly/used over a long period of time

Question 10

What are the 4 factors of production?

Answer 10

Land - natural
Labour - human
Capital - artificial or man made
Enterprise - human capital

Question 11

Define land

Answer 11

All the natural resources.
As the supply of land is limited it is a very valuable resource.

Landlord reward - rent

Question 12

Define labour

Answer 12

Refers to the human resource in the business - the workers who are employed to manufacture the product or provide the service.
This could come as
physical labour- digging roads
Mental labour - office workers

Reward - wage

Question 13

Define capital

Answer 13

The manufactured resource that is used in the production process to make goods and services for the future.

Capitalist Reward - interest

Question 14

Define enterprise

Answer 14

The skill and risk-taking ability of the person who brings the other resources together in the correct proportions to produce a good or service and run the business successfully.
Better known as entrepreneurs.
Reward - profit

Question 15

What does it mean to be enterprising?

Answer 15

Having or showing initiative and resourcefulness.

To be able to spot a good business opportunity and have the vision and drive to make it succeed

Question 16

What are the 13 key characteristics of an entrepreneur?

Answer 16

Initiative - contributes original ideas which gives them an edge over competitors
Self confident - has self confidence and a passion about their venture
Independent - has the ability to work independently and develop their ideas
Risk taker - willing to take calculated risks and to encourage other financiers such as banks to lend money
Resilient - is not discouraged by failures and setbacks and understands that many good business ideas don’t succeed as it may not be the right place or time.
Leadership skills - has good leadership qualities
Interpersonal skills - can motivate others in the work team and inspire them with enthusiasm
Committed - committed and willing to make personal sacrifices for the benefit of their business
Dedicated and hardworking - has the energy to work hard to make sure that the business achieves its full potential
Determination - has the vision of what the business could become and works single minded towards that goal.
Creative - is a creative thinker and shows initiative
Self control - has self control and emotional stability
Decision maker/confident - will make all the decisions for their business.

Question 17

Why does the government encourage enterprise?

Answer 17

• it reduces unemployment
• new ideas may succeed and provide fresh opportunities
• people feel motivated
• competition ensures a healthier business environment

Question 18

What are the risks of an entrepreneur?

Answer 18

Losing money
Losing time
Personal stress or health issues

Question 19

What are the benefits of an entrepreneur.

Answer 19

Profit
Becoming famous
Personal satisfaction