The Purpose And Nature Of Businesses Flashcards
What is an objective?
A short term specific target
What is an aim?
A long term more general target
Define entrepreneur
Someone who takes a calculated risk when setting a business or businesses in return for a financial gain.
What are reasons (6) for starting up a business? Give an example for each reason.(5)
- To produce a good
e. g. Coca Cola, Cadbury - To produce a service
e. g. Premier Inn, Talk Talk - To distribute products
e. g. Tesco, Asda - To benefit society
e. g. Charities (The Red Cross), Social enterprises - Filling a gap in the market
e. g. Opening a hair salon in a village with no other hairdressers - To fulfill a business opportunity
What is the difference between goods and services?
Give examples
Good are tangible items that can be used be and stored.
E.g. computers, food, clothes
Services are intangible actions that cannot be stored
E.g. hairdressing, train journeys, internet access
What is the difference between needs and wants?
Give examples.
Needs are things required in order to survive
E.g. food, clothes, water, warmth
Wants are things that people would like to have but can survive without
E.g. designer accessories, holidays, laptops, mobile phones, cars
What are the four factors of production?
Land
Labour
Capital
Enterprise
Describe land
Land- physical land where the business is located, and also the natural resources that a business might need:
Non renewable sources: gas, oil
Renewable sources: wind power
Labour- the staff needed by the business, and also the skills and qualifications they have
Capital- machinery and equipment needed by the business to make the products or provide the service.
Enterprise- the entrepreneur who takes a risk and creates the business using the other three factors of production.
What is opportunity cost?
Something given up in order to do something else
What are the three sectors businesses are split into depending on what they do?
Give examples for each.
Primary sector- first stage of the production process- produce or extract raw materials
E.g. fishing, farming and mining
Secondary sector- second stage of the production process- makes or manufactures goods- they take the raw materials from the primary sector and turn them into finished goods
E.g food manufacturers (e.g.) Heinz,
car manufacturers (e.g.) BMW, furniture manufacturers
Tertiary sector- the final stage of the production process- provides services
E.g hairdressers, estate agents and restaurants
What are characteristics of entrepreneurs?
Why do they have these characteristics?
- hard working- new business= long hours, variety of tasks
- organized- keep on top of day to day tasks + planning for the future, arrange finances and meet deadlines
- innovative- new ideas to make customers happy
- willing to take a risk- money, time, (possibly) old job
What are the objectives of entrepreneurs (starting a business)?
- be there own boss- independence, + freedom to make you own decisions
- flexible working hours
- pursue an interest
- increase their income = improve their quality of life
- fill a gap in the market
- escape a job they are unhappy with
- fulfill an ethical or social
What can objectives be split into?
Financial and Non- financial objectives
Describe labour
Labour- the staff needed by the business, and also the skills and qualifications they have.
Describe capital
