1: Enterprise Flashcards
Enterprise
The willingness and ability to think of a new business idea and to take risks in starting up a new business.
Entrepreneur
Someone who starts and runs a business and has responsibility for the risks involved. In order to do this, an entrepreneur has to be able to manage the four factors of production efficiently. They are:
1) Land or Natural resources
2) Labour
3) Capital, which is any kind of equipment used in production
4) Enterprise
Motives for becoming an entrepreneur:*
- to escape an uninteresting job
- to pursue an interest or a hobby
- to exploit a gap in the market
- to market a new or innovative product
- to be innovative in terms of the process of making a product
- to be their own boss, be creative & make decisions.
- to work from home and reduce travelling time
- to have a second carer
- to provide a service or product not for profit
Opportunity cost
The cost of an activity expressed in terms of the next best alternative, which has to be given up when making a choice. For example, what could an entrepreneur do with their time, expertise and money if they didn’t start a business?
Government grants
Sums of money given to a business for a specific purpose or project. They often contribute to the costs of a project rather than fund the whole thing. Grands do not usually have to be paid back.
Risk and reward*
Entrepreneurs that take risks, often using their own money. In return the expect a reward. The ward is likely to be financial, but it his also likely to include the non financial reward of the satisfaction of meeting customer needs and doing a good job.
