Unit 1.1: Exploring Business - Enterprise, Markets, and Ownership

Comprehensive practice questions covering enterprise roles, entrepreneur characteristics, market types, scales of operation, and business ownership structures based on Unit 1.1 class notes.

What is Enterprise?

Enterprise is the process of creating a new business or developing a new product/service to meet customer needs.

How is an entrepreneur defined in the notes?

An entrepreneur is someone who starts, organises, and runs a business, taking financial risks in the hope of making a profit.

What are the roles of an entrepreneur?

Identifies gaps in the market, creates business ideas, organises resources (labour, capital, materials), takes risks, creates employment, and generates wealth in the economy.

What are the three financial motives for becoming an entrepreneur?

Earn profit, financial security, and provide income for themselves and family.

What are the six non-financial motives for becoming an entrepreneur?

Be their own boss, personal satisfaction, challenge and achievement, fill a gap in the market, help society (social enterprise), and improve the environment (environmental enterprise).

What are the characteristics of successful entrepreneurs that WJEC often asks learners to apply?

Risk-taking, self-confidence, creativity, innovation, leadership, communication skills, ambition, negotiation skills, product knowledge, hard-working, passionate, and flexible minded.

How do entrepreneurs contribute to the economy?

They create jobs, introduce new products/services, encourage innovation, increase competition, generate tax revenue, increase exports/international trade, and contribute to economic growth.

What is the definition of a market?

A market is where buyers and sellers come together to exchange goods and services.

What are the four types of markets based on geographical area?

Local Market, Regional Market, National Market, and Global Market.

What are the benefits of operating in larger markets?

More customers, higher sales potential, greater brand recognition, and economies of scale.

What are the risks of operating in larger markets?

More competition, greater costs, increased complexity, and higher financial risk.

What are the characteristics of a local business?

Small customer base, few employees, usually owner-managed, limited product range, and strong community links.

What are the advantages and disadvantages of a local business?

Advantages: Personal customer service, lower costs, easier communication. Disadvantages: Limited growth opportunities, smaller market, less access to finance.

What characterizes a national business?

Operates across a whole country, has multiple outlets, large product range, and significant resources.

What are the disadvantages of a global business?

Exchange rate risks, cultural differences, and political and legal challenges.

Define the Private Sector, Public Sector, and Not-for-Profit Sector.

Private: Owned by individuals/shareholders for profit. Public: Owned/controlled by government for public benefit. Not-for-profit: Operates for social, community, or charitable purposes.

What are the disadvantages of being a Sole Trader?

Unlimited liability, limited finance, long working hours, and heavy responsibility.

What are the advantages and disadvantages of a Partnership?

Advantages: Shared workload, more ideas/expertise, more finance. Disadvantages: Shared profits, disagreements possible, unlimited liability, slower decision-making.

What is a Private Limited Company (Ltd)?

A company owned by shareholders whose shares are privately held.

How does a Public Limited Company (PLC) differ from an Ltd?

A PLC can sell shares to the public through a stock exchange, allowing for large amounts of finance and increased growth potential, but faces public scrutiny and expensive setup costs.

What is the difference between Unlimited Liability and Limited Liability?

Unlimited Liability: Owner is personally responsible for debts and may lose personal assets. Limited Liability: Owners only risk the money invested; personal possessions are protected.

What is Business Planning?

The process of deciding objectives, resources needed, products to sell, and how to attract customers.