TOPIC 1.1 Enterprise and Entrepreneurship Flashcards
What is the difference between a good and a service?
A good is a physical tanglible product (you can touch it)
A service is an experince that is intagible (can’t touch it)
What is the difference between a consumer and a customer?
A customer purchases the product and the consumer uses the product
For what three reasons do new business ideas come about?
- Changes in technology
- Changes in consumer needs
- A product becoming obsolete
What does it mean if a product is obsolete?
It is outdated and no longer in use
What are payment platforms?
Enable businesses to take online payments from customers. They are usually free for the customer to use, but take a small amount of commission from
the seller and provide the customer with peace of mind.
What is an entrepreneur?
Someone who creates a business, taking on
financial risks with the aim of making a profit from the business.
In what two ways do new business ideas come about?
- Original ideas
- Adapting existing concepts
What are three risks that start-ups face?
- Business failure
- Lack of (financial) security
- Financial loss
What is the difference between variable and fixed cost?
- Variable costs are costs that depend on the amount of products you manufacture (e.g. Raw materials)
- Fixed costs (overheads) are costs that remain no matter your production rate (e.g. Rent)
How do you work out variable cost?
Cost per unit x sales volume
What are financial rewards for a start-up?
- Survival
- Profit
- Wealth
- Income
- Financial Security
What are non-financial rewards for a start-up?
Personal satisfaction Independence Control Challenge Flexible working
What is a stakeholder?
Any person with interest in the business
What are the three purposes of a business enterprise?
- To meet customer needs
- To add value
- To provide goods and services
How may a business add value?
- Convenience
- Quality
- Branding
- Design
- USP
