Enterprise Flashcards
(17 cards)
What is an entrepreneur ?
A person who uses an idea and starts a business taking on the financial risks in the hope of making a profit.
What are SME’s ?
Small and Medium businesses whose personnel numbers fall below certain limits.
Define enterprise and the role of it.
What a person uses when running a business including initiative and risk taking.
The role is an individual or organisation whose aim is to satisfy the needs or wants of consumers by providing goods or services they will buy.
Why set up a business ?
- To gain a profit
- To turn a hobby into a business
- To use redundancy money
- To be their own boss
What are needs ?
Things we must have in order to stay alive e.g. food, water, warmth, security, shelter.
What are wants ?
Things we don’t really need but would like to have e.g. a better phone or a faster car.
What are goods ?
Items that can be seen and touched and once they are paid for they are owned by the customer e.g. food and drink.
What are services ?
Intangible services that are paid for but not owned e.g. hairdressing or plumbing.
Give examples of entrepreneurial characteristics.
- Hardworking
- Resilient
- Confident
- Creative
- Perseverance
- Motivated
- Dedicated
- Passionate
- Proactive
What are the financial motives ?
- Profit maximisation - making the maximum profit available
- To gain financial freedom
- Financial rewards can be greater than being paid by someone else
- Can keep profits for themselves
What are the non-financial motives ?
- Satisfying - to make sufficient profits to satisfy the entrepreneur but not the greatest profit possible
- Ethical stance - starting the business with the intention of helping others e.g. more comfortable wheelchairs
- Social entrepreneurship - to create sustainable profit making that also benefits the community e.g. charity shop
- Independence and home working - when you want more freedom to work and choose your own days and hours
Describe the characteristics of SME’s.
- Small = less than 50 employees
- Medium = less than 250 employees
- Small turnover
- Usually a sole trader, partnership or private limited company
- Turnover is less than £50m
- Make up the largest population of UK businesses
- Employ around 14.4 million people and have a combined turnover of £1.6 billion
What is the primary sector and how are entrepreneurs important to it and the economy ?
Industries that extract raw materials directly from the earth or sea. Entrepreneurs take up a large proportion of this sector and lots of small businesses help get raw materials from the earth and land within the UK.
What is the secondary sector and how are entrepreneurs important to it and the economy ?
Industries that process and manufacture products from raw materials. Entrepreneurs make up a considerable amount of this sector, helping to use resources from the primary sector to manufacture things such as cars, clothes.
What is the tertiary sector and how are entrepreneurs important to it and the economy ?
Industries that provide a service. Entrepreneurs make up a large proportion through retail and restaurants.
Positive impacts of SME’s.
- Account for most businesses in the UK
- Buy products and components from other businesses
- Employ people and create jobs - spend money on local community
- Pay taxes - contribution to tax revenues that are then spent on public services
- Provide competition which can keep prices lower for customers
- Can be innovative
- May sell goods and services overseas, raising further money for the UK economy
- Encourage investment into the UK economy
- May become large businesses
Negative impacts of SME’s.
- Operate on a smaller scale and more likely to fail - particularly in times of recession
- Have smaller budgets and may find it harder to compete effectively with larger businesses
- Less well recognised compared to larger businesses so can have less influence in the economy
- May find it harder to raise finance to grow
- May find it harder to obtain economies of scale
