1.5

Question 1

entrepreneurship

Answer 1

• take risks
• make business decisions
• organise resources
• run and develop existing business

Question 2

intrapreneurship

Answer 2

• promoting entreprenerial thinking and behaviour within a business
• motivates employees to think and act like entrepreneurs

Question 3

barriers to entrepreneurship

Answer 3

• • entreprenuerial capacity, ability to take risks
• access to finance
• lack of training
• fear of failure

Question 4

financial reasons for setting up a business

Answer 4

• profit maximisation
• profit satisficing , simply satisfying profit not maximising

Question 5

non financial reasons for setting up a business

Answer 5

• ethical stance
• social entrepreneurship
• independence
• home working

Question 6

business objectives

Answer 6

• sales maximisation
• market share
• cost efficiency
• employee welfare
• customer satisfaction
• social objectives

Question 7

sole trader

Answer 7

• single owner
• easy and inexpensive to set up, owner retains complete control
• profits belong to owner
  X unlimited liabilitty, owner personally responsible for debts
  X limited access to finance and capital

Question 8

partnership

Answer 8

• 2 or more people together
• easy to set up, inexpensive
• shared responsibility with more knowledge and skills available
  X unlimited liability
  X disputes between partners
  X profits shared equally

Question 9

private ltd company

Answer 9

• shares can only be sold by owner, usually to family or friends
• limited liability
• access to greater finance and capital
• easier to transfer ownership
  X expensive and time consuming
  X have to do annual financial reports
  X shareholders have little control over company

Question 10

PLC benefits

Answer 10

• access to large amounts of capital, cost effective
• risks shared among large pool of shareholders, reducing financial risk
• increased liquidity as they can float on the stock market, increased company value

Question 11

opportunity costs

Answer 11

• loss of the next best alternative when making a decision
• choices have to be made to best allocate limited resources

Question 12

potential trade- offs

Answer 12

product - upgrading exisiting product rather thsn research for new product
customer sales
market research - skipping to get product to market quicker
business ownership - partnership, loses benefits of ltd
promotional methods - sacrifice one for another