unit 1 risks and rewards for entrepreneurs

Question 1

what is involved opening a business

Answer 1

Setting up a business involves risks and reward. Profit is the reward for risk-taking. Losses are the penalty of business failure.
An owner may decide to close a business if losses are being made

Question 2

risks of opening a business

Answer 2

no investments
lose money
no one will stock it
no customers
someone copies your idea
bankruptcy and the business could fail

Question 3

rewards of opening a business

Answer 3

create more jobs, economy increase by taxes
more variety to customers profit and success
investments
sanctification of customers

Question 4

why do we need entrepreneurs

Answer 4

creates jobs
help economic growth
prosperity
more competition
more variety to customers

Question 5

financial risk

Answer 5

borrowing from bank can land you in dept

lose all the money you invest

Question 6

health risk

Answer 6

overworking
physical and mental health
stress a lot of work
long hours

Question 7

family and relationships strains

Answer 7

lack of time for family
being stress
distracted by work

Question 8

reputation risks

Answer 8

People may not want to invest in your business if your old business fails
having a bad reputation with customers

Question 9

time risks

Answer 9

takes a lot of your time

not enough time spent with family

Question 10

failure risks

Answer 10

People may not want to buy your products
business closes
too much competition

Question 11

independence rewards

Answer 11

be your own boss
do whatever you want
work when and how you want

Question 12

self satisifaction

Answer 12

Achievements from setting a business from scratch

Question 13

changing habits of customers

Answer 13

Inventing goods that change customers habit

e.g inventing the phone

Question 14

financial rewards

Answer 14

successful business can keep you stable

Question 15

make your own desicions

Answer 15

independence

you choose the choices that are suitable for you

Question 16

what causes businesses to fail (particularly new small business)

Answer 16

Poor planning is a major cause of business failure.
Some entrepreneurs ignore planning and analysis and instead rely on their gut instinct. They launch products they believe customers want and competitors cannot match.

Question 17

how can risks be reduced

Answer 17

market research

Question 18

what is a business plan

Answer 18

A business plan includes the results of market research and competitor analysis. Analysis is when a business interprets information.

Question 19

how can risks be reduced information

Answer 19

market research
speak to potential customers
look at existing data e.g. unemployment rates
information reduce risks to make the right decision

Question 20

how can risks be reduced advice

Answer 20

speak to people with a successful business (pre - warning about possible mistakes )
adviser / experts
spot flaws in your business

Question 21

how can risks be reduced planning

Answer 21

create a business plan
forecast suppliers, finances and staff
where would the money come from
contingency planning saving money encases of money issues 
backup plan