1.1 Enterprise and Entrepreneurship

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34 Terms

1

Dynamic nature of business

The idea that business is ever-changing because external factors, such as technology, are always changing.

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2

demand

The number of units that customers want and can afford to buy.

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3

obsolete

A product or service with sales that have declined or come to an end as customers find something new.

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4

Entrepreneur

Business people who see opportunities and are willing to take risks in making them happen.

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5

competitive advantage

A feature of a business that helps it to succeed against rivals

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6

Adapting existing products

Finding new products based on the original one, such as Wall's White Chocolate Magnum

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7

Why do new business ideas come about?

  • changes in technology

  • changes in what consumers want

  • products and services becoming obsolete

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8

How do new business ideas come about?

  • original ideas

  • adapting existing products/ services/ ideas

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9

Risk and Reward

The balance between the worst that can happen and the best that can happen

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10

Business failure

The collapse of a business, probably leading to its closure.

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11

Independence

The need by many business owners to make their own decisions and be their own boss.

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12

Lack of security

Uncertainty for a business owner about day-to-day family income and assets

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13

number of sole trader business in UK

3.3 million

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14

number of limited companies in UK

1.6 million

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15

number of partnership business in UK

0.45 million

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16

Why do businesspeople need to take risks?

So that the business can grow.

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17

What is the possible negative impact of taking risks on business?

  • Business Failure

  • Financial Loss

  • Lack of security

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18

What are the rewards of taking risks for business?

  • Business Success

  • Profit and Wealth

  • Independence

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19

What do successful business owners have to weigh up?

  • chances of business failure

  • costs/benefits of success or failure

  • the implications for the business as a whole

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20

goods

Products that are manufactured or grown that consumers can buy and own.

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21

customer needs

The products or services people need to make life comfortable

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22

customer wants

What people choose to spend their money on, once the weekly bills have been paid

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23

services

Doing work for other people rather than producing goods, for example running a shop.

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24

percent of total GDP of UK that is services

79.6%

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25

percent of total GDP of UK that is industry

19.7%

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26

What should a producer do?

  • design packaging

  • get the right product range: big enough to be interesting but not so wide as to end up with too many small sellers

  • persuade shops to stock product(s)

  • make sure deliveries are on time + accurate

  • advertise

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27

What is a business for?

  • goods and services

  • meeting customer needs and wants

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28

How do you add value?

  • convenience and speed

  • good design

  • quality

  • brand name

  • USP

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29

What does USP stand for and what does it mean?

Unique selling point. It is an original feature that rivals aren't offering.

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30

Value Added

The difference between the selling price and the cost of bought in goods and services (the difference that creates the possibility of profit)

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31

What does value added pay for?

  • distribution costs(shop rents, wages, bills)

  • administration(head office salaries)

  • taxation

  • dividends

  • profit reinvested into business

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32

Branding

Giving a product or service 'personality', with a name and logo that makes it stand out

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33

Name the roles of entrepreneurship.

  • taking risks

  • making business decisions

  • showing leadership

  • organising resources

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34

Resources

things or people that can be used to help build and run the business.

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