1.1 - Enterprise

• Definition of entrepreneur?

  a person who spots an opportunity and shows initiative and a willingness to take risks in order to benefit from the potential rewards
• Definition of an enterprise?

  the willingness to take risks to undertake a new venture and show initiative with a view of gaining a reward
• What are SME's?

  small to medium sized businesses with less than 250 staff and less than €50 million revenue
• what are needs vs wants?

  needs = what you've got to have in order to survive e.g food -> limited

  wants = luxury items, constantly changing as people are constantly looking to improve their quality of life -> unlimited
• 5 examples of characteristics/skills of an entrepreneur

  -hardworking

  -risk taking

  -show initiative

  -self-motivated

  -opportunity spotter
• What are financial motives of entrepreneurs?

  • profit maximisation - make as much profit as possible
  • profit satisfaction - to make enough profit to be satisfied but not purely motivated by profit, may be to maintain a life work balance
• What are non-financial motives of entrepreneurs?

  • ethical stance - behave in a manner deemed to be morally correct/match an individuals values e.g fair trade + animal cruelty free products
  • independence - 'be your own boss'
  • to turn a hobby into a business - e.g painting
• Definition of primary sector of industry + employment rate

  -businesses that extract raw materials e.g farming/fishing

  -employment rate has decreased, as raw materials have ran out and are now found elsewhere in the world
• Definition of secondary sector of industry + employment rate

  -businesses that turn raw materials into finished goods e.g manufacturing

  -employment rate has decreased due to de-industrilisation + technology has replaced workers + relocation of UK manufactures abroad due to lower costs -> offshoring + education system is geared towards tertiary sector = not producing as many graduates.
• Definition of tertiary sector of industry + employment rate

  -businesses that provide services for other businesses or individuals e.g banking + retail

  -employment rate has increased due to manufacturing being 'undesirable' and people wish to work in better conditions + education system is more geared to the tertiary sector e.g degrees at university that lead to tertiary sector employment -> law
• 3 benefits of entrepreneurs to the UK economy

  -help the economy by creating new jobs -> governments benefit from greater taxation of businesses and employees

  ------> positive multiplier effect = can kickstart other businesses to open

  -less government spending on infrastructure e.g a business may invest into improving local conditions to attract customers

  -bring new ideas into the market + drive the development of technology further e.g James Dyson.
• 2 drawbacks of entrepreneurs to the UK economy

  -many small businesses fail -> lead to unemployment + negative multiplier effect --> people then rely on welfare benefits = more government spending on supporting unemployed.

  -may require government support e.g incentives + funding to refrain from going bankrupt
• Definition of a stakeholder + examples

  an individual with an interest in the actions of a business e.g customers, employees + suppliers
• who are the most important stakeholders in a company quote?

  " all stakeholders are equal, but some stakeholders are more equal than others."
• 6 stakeholders affected by a business

  -customers

  -employees

  -suppliers

  -community

  -shareholders

  -governments