1.1 - Enterprise and entrepreneurship

Question 1

What is the difference between a good and a service?

Answer 1

A good is a physical tanglible product (you can touch it)
A service is an experince that is intagible (can’t touch it)

Question 2

What is the difference between a consumer and a customer?

Answer 2

A customer purchases the product and the consumer uses the product

Question 3

Why new business ideas come about?

Answer 3

New business ideas come about because of the dynamic nature of business?

• Changes in technology
• Changes in consumer wants
• Products and services becoming obsolete

Question 4

What does it mean if a product is obsolete?

Answer 4

It is outdated and no longer in use

Question 5

What are payment platforms?

Answer 5

Enable businesses to take online payments from customers. They are usually free for the customer to use, but take a small amount of commission from
the seller and provide the customer with peace of mind.

Question 6

What is an entrepreneur?

Answer 6

Someone who creates a business, taking on
financial risks with the aim of making a profit from the
business.

Question 7

In what two ways do new business ideas come about?

Answer 7

• Original ideas
• Adapting existing concepts

Question 8

What are risks that new bsuinesses face?

Answer 8

• Risk of business failure
• Lack of (financial) security
• Finacial loss

Question 9

What is the difference between variable and fixed cost?

Answer 9

• Variable costs are costs that depend on the amount of products you manufacture (e.g. Raw materials)
• Fixed costs (overheads) are costs that remain no matter your production rate (e.g. Rent)

Question 10

How do you work out variable cost?

Answer 10

Cost per unit x sales volume

Question 11

What are financial rewards for new businesses?

Answer 11

• Survival
• Profit
• Wealth
• Income
• Financial Security

Question 12

What are non-financial rewards for new businesses?

Answer 12

• Personal Satisfaction
• Challenge
• Independence
• Control
• Helping Others

Question 13

What is a stakeholder?

Answer 13

Any person with interest in the business

Question 14

What are the purposes of business enterprise?

Answer 14

• To meet customer needs
• To add value
• To provide goods and services

Question 15

How may a business add value?

Answer 15

• Convenience
• Quality
• Branding
• Design
• USP

Question 16

What are the roles of an entrepreneur?

Answer 16

• Organise resources
• Make business desicions
• Take risks

Question 17

How do new business ideas come about?

Answer 17

• Original ideas, ideas that have not yet been thought of
• Adapting exisiting products or services, new ideas to make changes to existing products

Question 18

What purpose do businesses serve?

Answer 18

• provide services
• provide goods

Question 19

What is enterprise in business?

Answer 19

• A factor of production which combines land, capital and labour (economists’ approach)
• A business or organisation
• The qualities that allow an entrepreneur to take advantage of business opportunites

Question 21

What are the qualities of a good entrepreuneur?

Answer 21

• organised
• hardworking
• willingness to take risks
• innovative