101 - Enterprise

Question 1

what is enterprise?

Answer 1

• having the skill and taking the initiative and the risk to make a business happen

Question 2

what is an SME?

Answer 2

• small turnover - less than 50m
• fewer than 250 employees
• usually very small - less than 50 employees

Question 3

SME’s in the UK

Answer 3

• There were 5.9 million private businesses in the UK at the start of 2019
• of these 5.85 were SME’s which is 99.9% of all UK businesses

Question 4

what are needs?

Answer 4

• what people require to survive. Food, water, and clothing.
• needs are limited but not fixed

Question 5

what are wants?

Answer 5

• what people desire, what they would like to have
• wants are unlimited and not fixed

Question 6

where can business opportunities be found? (4)

Answer 6

• where a market need exists.
• where a service can be offered to a business
• through looking or listening to complaints or critcisms about a product/service
• through the internet

Question 7

what is an entrepreneur?

Answer 7

A person who sets up a business by taking on
the financial risks in the hope of making a profit

Question 8

financial and non-financial benefits of entrepreneurs?

Answer 8

• earn an income and make a profit
• turn a hobby or passion into a business
• to be their own boss
• to make use of skills
• have identified a gap in the market
• few job opportunities and the availability of government grants

Question 9

characteristics and skills of entrepreneurs

Answer 9

• being a risk taker
• taking the initiative and being proactive
• being an effective organiser
• creativity and being innovative
• hardworking
• determined and perseverance

Question 10

Explian the importance of entrepreneurs and SME’s to the primary, secondary and tertiary sectors of the UK economy (5)

Answer 10

• innovators. Bring new ideas to the market & drive the development of new technologies
• have the vision and willingness to take risks which drives business forward by improving products and services
• help the economy by creating new jobs
• help boost the economy by providing new products that people can buys. More money spent usually = economy grows which leads to better standard of living
• government benefits from taxation

Question 11

what are the sectors of the economy?

Answer 11

1)primary- extract raw materials directly from the Earth or sea
2) secondary- process and manufacture products from raw materials
3) tertiary - provide a service

Question 12

disadvantages of SME’s and entrepreneurs on businesses and the economy

Answer 12

• small scale and more likely to fail in times of recession and hardship
• high failure rate. Around 80% fail within their first year in the UK
• smaller budgets -> dont have funds to compete with larger organisations
• they do not have economies of scale (savings made by larger business by e.g.buying in bulk) -> higher costs and cannot charger lower prices to consumers

Question 13

who are the stakeholders in the business and what are their interests in the business?

Answer 13

1) shareholders - want high profits so they will receive a dividend and increase value of shares
2)directors and managers - bonus may be linked to profit, retain job/maximise profit
3) employees - wages, good working condition/job security
4) customer- efficient service/high quality product and competitive price
5) suppliers - fair price and paid on time
6) government- want tax from profits and people being employed
7) local communities - not destroying local environment