UNIT 1: 1.1 What is a business?

Question 1

ENTREPRENEURSHIP: What are the opportunities/reasons for starting a business?

Answer 1

• Overcoming unemployment: Losing a job encourages many people to start a business of their own
• Being independent: Creating your own business allows you to have flexibility around their work and control over their working lives
• Improving standard of living: Desire to earn more money, drives most entrepreneurs as they believe they will achieve a higher income.

Question 2

ENTREPRENEURSHIP: Challenges with starting a business

Answer 2

Do I have appropriate personal qualifications?
Is there a market for my product?
Do I have sufficient capital?
Where should I locate my business?
How do I build a customer base?
How do I compete effectively?
Must I keep accurate business records?
Do I have the necessary management skills?
How do I deal with change?

Question 3

What are the four economic sectors?

Answer 3

THE FOUR SECTORS:
- Primary
- Secondary
- Tertiary
- Quaternary

Question 4

Describe each of them

Answer 4

Primary sector business activity - extracting natural resources

Secondary sector business activity- manufacturing and processing products from the natural resources

Tertiary sector business activity- provide services

Quaternary sector business activity- information technology, research and development

Question 5

What is a business?

Answer 5

any organisation that uses resources to meet the needs of customers by providing a product or service that they demand

Question 6

What are the business ‘inputs’

Answer 6

Inputs –> factors of production

Land: natural resources used to create good/service e.g. coal, timber, oil

Labour- manual & skilled labour

Capital- finance needed to set up & continue operations of a business + human made resources such as machines, computers

Enterprise- driving force of business (risk-takers, decision-makers, combine other factors into a unit that is capable of producing goods and services