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What are the three purposes of business enterprise and entrepreneurship?
Spotting an opportunity, Developing an idea, satisfying customer needs
Define entrepreneur
A person who takes the risk of starting an running a business enterprise
What are the characteristics of an entrepreneur?
Confidence, determination, risk-taking, creativity
What are the financial risks of entrepreneurship?
If the business doesn’t succeed, the risk of losing savings and having to pay off debts
What are the non-financial risks of entrepreneurship?
The strain of running a business can take a toll on your mental and physical health
What are the non-financial rewards of entrepreneurship?
Independence, Self-satisfaction and making a difference
What are the steps to developing a business idea?
The idea, the people, market research, finance, competitors
Define aims and objectives
statements of what the business is trying to achieve
Define a business plan
A simple plan which sets out details of the product or service being sold
Define finance
A business word used instead of money. The finance needed
Why must you create a business plan?
reduce the risk of failure, to be as successful as possible
What is included in a business plan?
Identifying the market, identifying the resources, identifying the finance needed to start or grow a business and what is needed to achieve the business’s aims and objectives
Advantages of being a sole trader
Easy to set up: only a few forms to fill in
Easy for the owner to control: the owner makes all the decisions
Business information is kept private: no information about profits must be published
Workload: the owner makes all the decisions but may have to work long hours
Disadvantages of being a sole trader
Continuity: the business stops when the owner dies
Raising finance: this is limited because there is only one person to invest in savings and banks may think they are too much risk to lend to. The business cannot sell shares to raise finance.
Level of liability(risk): owner has unlimited liability
Advantages of a partnership:
Easy to set up: Only needs a deed of partnership
Easy for the owners to control: the partners make decisions between themselves
Business information is kept private: No information about profits must be published
Disadvantages of a partnership:
Easy for owners to control: Partners can disagree which can lead to disagreements with decisions, the profits will have to be shared between all the owners
Continuity: a new deed of partnership will need to be signed every time a new owner leaves or joins
Rising finance: Usually there are only a few partners to invest in the partnership and banks may think they are too risky to lend to. Ability to finance may become difficult as a result. Partnership cannot sell shares to raise finance
Level of liability: partners have unlimited liability
Workload: workload is shared between partners but the fewer the partners, the greater the workload they each have
Advantages of a private limited company:
Easy for owners to control: Shareholders can restrict who can buy shares
Continuity: the business continues even if the shareholders sell their shares or die
Raising finance: New shareholders can invest and banks are willing to lend. Larger amounts can be raised than sole traders and partnerships.
Level of liability: the owners have and benefit from limited liability
Disadvantages of a private limited company:
Easy to set up: the registrar of companies requires legal documents which take time to produce
Business information privacy: The public can see information about the business
Workload: managers are employed to make decisions
Advantages of a public limited company
Continuity: the business continues even if the shareholders sell their shares or die
Raising finance: New shareholders can invest and banks are willing to lend. Large amounts of money can often be raised
Level of liability: the owners have and benefit from limited liability
Disadvantages of a public limited company:
Easy to set up: The register of companies requires legal documents which take time to produce
Easy for the owners to control: Anybody can buy shares
Business information privacy: The public can see information about the business
Workload: managers are employed to make decisions
What is a partnership?
A business owned by between 2 and 20 partners
What is a sole trader?
A business owned by one person
What is a deed of partnership?
A document stating who owns the partnership, how much money each partner has invested and their role in the business
What is a private limited company(Ltd)
Usually a smaller business, it can sell shares to invited people only
What is a share?
Part ownership of a business
What is limited liability?
The owners of a business can only lose the money they have invested in a business if it fails
What is unlimited liability?
The owner of a bus
What is an asset?
Items owned by the business
Note 
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