Theme 1: Section 5 Entrepreneurs and Leaders

Question 1

Entrepreneur

Answer 1

Take risks to gain a reward (profit).

Question 2

Creating a Business

Answer 2

Identify a gap In the market, market research

Question 3

Innovative

Answer 3

Think of new products or take risks of making new products reality.

Question 4

Barriers in Entrepreneurship

Answer 4

Lack of money or expensive technology, overcome this by raising capital (loan).

Question 5

Risk

Answer 5

Probability on what they’ll decide will have a negative effect.

Question 6

Uncertainty

Answer 6

Unpredictable and beyond control, exchange rates and political factors.

Question 7

Commodities

Answer 7

Basic goods, agriculture or mining, raw materials.

Question 8

Entrepreneur characteristics

Answer 8

Risk taker, hard-working and innovative.

Question 9

Entrepreneur skills

Answer 9

Communicate with everyone, problem skills, reliable.

Question 10

Profit Maximisation

Answer 10

Making as much profit as possible , reduce costs and increasing sales revenue.

Question 11

Profit Satisficing

Answer 11

Making enough profit, not maximising it to suit their lifestyle.

Question 12

Non-Financial motives

Answer 12

Not reporting to a boss , own ideas and work-life balance/flexibility.

Question 13

Delegate Responsibility

Answer 13

Build trust, consult employees and verify decisions made to give responsibility.

Question 14

Develop emotional Intelligence

Answer 14

Identifying/managing emotions, responding appropriately.

Question 15

Become less reactive

Answer 15

Make decisions quickly, responsible for more people, consult staff.

Question 16

Aim

Answer 16

Long-term target set by business.

Question 17

Objective

Answer 17

Short-to medium-term target set by business.

Question 18

Survivals the most important short-term objective

Answer 18

Poor cash flow management, expands too quickly results in higher costs before sales.

Question 19

Profit objectives

Answer 19

Achieve a certain amount or profit each month or increase profit percentage over a year.
Monitors achievements.

Question 20

Increasing market share increases revenue

Answer 20

Gain more market share, increase sales ,as retailers encouraged to stock the products, more customers tempted to buy.

Question 21

Improving Cost efficiency

Answer 21

Saving money by reducing unit costs, generate more profit.

Question 22

Improving employee welfare leads to lower cost and more sales

Answer 22

Improving well-being of staff, help stay motivated, more productive.

Question 23

Social objectives

Answer 23

Maximising profits, customers more likely to buy from a firm that’s socially responsible. Ben and Jerry’s ‘cone together’ support refugees.

Question 24

Sole Trader

Answer 24

Individual trading in their own name, self employed, electricians. Full financial control responsibility.

Question 25

Sole Trader Advantages

Answer 25

Freedom, profit, simplicity= less form filling, saving on fees= no legal costs for ownership.

Question 26

Sole Trader Disadvantages

Answer 26

Risk, time, Expertise, vulnerability no one to cover, unlimited liability responsible for debts.

Question 27

Business Partnership

Answer 27

2-20 people, unlimited liability= owners shared responsibility.

Question 28

Private limited company

Answer 28

Owners have to agree before anyone buy/sells shares. Paid Dividends in return of investment. Limited liability.

Question 29

Public limited company

Answer 29

Anyone can buy shares. Paid Dividends in return of investment. Limited liability.

Question 30

Dividends

Answer 30

Proportion of profits earned by the company, split between shareholders.

Question 31

Sole Traders and Partnerships become Private Limited Companies

Answer 31

Allows the business to sell shares, more money for growth. Limited liability, financial protection, take more risks than Sole Trader and Partnership. Time consuming, paperwork.

Question 32

Private Limited grow Into Public Limited Company.

Answer 32

Potential growth for stock market flotation(publicly sell shares first time) and transition. Raises capital

Question 33

Franchising

Answer 33

Agreement (contract) allowing to use business ideas, name model, in return fee, royal payments. Grow quickly, cheaper.

Question 34

Royal Payments

Answer 34

Percentage of Revenue or profit.

Question 35

Online businesses more popular

Answer 35

Cheap and easy to set up, overheads, fixed costs low. Work-life balance, technical issues.

Question 36

Lifestyle Business

Answer 36

Motivated by flexibility, low start-up costs more limited growth.

Question 37

Social Enterprise

Answer 37

Set up with core aim to use profits to benefit society, charity.

Question 38

Trade-off

Answer 38

One thing has to be reduced or given up to increase or gain another, Apple creating fewer products, high quality.

Question 39

Opportunity cost

Answer 39

Benefit that's given up to do something else.

Question 40

Design Mix

Answer 40

Minimise cost of product, low quality cheap product more sales

Question 41

Market Research

Answer 41

Too costly

Question 42

Business Ownership

Answer 42

Sole Trader changing to partnership spread risk

Question 43

Promotion

Answer 43

Appeals to more potential customers.

Question 44

Pricing Strategy

Answer 44

Boosts sales