BUSINESS NOTES

• What is an entrepreneur?

  Someone who sets up and runs a business
• What does enterprise refer to?

  Another term for business
• What are the factors of production?

  Land, Labour, Capital, Enterprise
• What does 'land' refer to in factors of production?

  Natural resources
• What does 'labour' refer to in factors of production?

  Human resources
• What does 'capital' refer to in factors of production?

  Machinery, Tools, Buildings
• What role does enterprise play in production?

  It brings the other three factors together
• Who is a stakeholder?

  An individual or organization interested in a business
• What are internal stakeholders?

  Managers, Owners, Employees, BOD
• What are external stakeholders?

  Local Communities, Government, Customers, Investors
• Why are entrepreneurship and enterprise important to the economy?

  They contribute to economic growth and job creation
• What key decisions do entrepreneurs make?

  Identifying opportunities and organizing resources
• How does entrepreneurship impact employees?

  It can lead to increased job security
• How does entrepreneurship affect customers?

  It provides more choices for consumers
• How does entrepreneurship impact suppliers?

  It can lead to increased orders for suppliers
• How does entrepreneurship affect the local community?

  It can lead to new jobs in the community
• How does entrepreneurship impact the government?

  It can lead to new jobs and increased tax revenues
• What is the primary sector of business?

  Extraction of raw materials
• What is the secondary sector of business?

  Manufacturing and processing of raw materials
• What is the tertiary sector of business?

  Providing services for others
• What are private sector businesses?

  Businesses owned by individuals
• What are public sector businesses?

  Owned and run by the government
• What are third sector businesses?

  Not-for-profit organizations motivated by social goals
• What is a local market?

  Operates within a specific geographic area
• What is a national market?

  Operates within a single country
• What is an international market?

  Operates outside the company’s home country
• What is a sole trader?

  A business owned by one individual
• What is unlimited liability?

  The owner is responsible for all debts
• What are the sources of finance for sole traders?

  Leasing, Retained profit, Overdrafts
• What are the objectives of sole traders?

  To keep all profits to themselves
• What are the advantages of being a sole trader?

  Easy to establish, flexibility, complete control
• What are the disadvantages of being a sole trader?

  Unlimited liability, difficulty raising finance, higher tax rate
• What is a partnership?

  A business owned by two or more people
• What is the deed of partnership?

  A document outlining partners' rights and responsibilities
• What are the advantages of partnerships?

  Shared liability, division of labour, cost-effective
• What are the disadvantages of partnerships?

  Insecurity, conflict, unlimited liability
• What is a limited liability partnership (LLP)?

  A partnership with limited liabilities for some partners
• What are the advantages of an LLP?

  Separate legal identity, limited liability, tax benefits
• What is a constraint in business?

  A factor that limits business operations
• What is added value?

  Selling a product at a higher price than cost