1.1 ENTERPRISE

Cards (20)

  • Enterprise
    The purpose of business activity
  • Factors of production needed for business activity

    • Land
    • Labour
    • Capital
    • Enterprise
  • Adding value
    The difference between the cost of purchasing raw materials and the price the finished goods are sold for
  • Economic activity
    Tries to provide for as many of our wants as possible, but we are still left wanting more
  • Opportunity cost

    The best alternative that we forgo, or give up, when we make a choice or a decision
  • Dynamic business environment

    • Keeps on changing due to factors like change in government policies, change in taste and choice of the consumer, change in technology
  • Reasons why businesses succeed or fail
    • Good imagination that attract people (Innovation) or value added goods
    • Tight financial control
    • Highly committed and motivated employees & directors
    • An efficient production system
    • Lack of market research
    • Lack of working capital
    • Lack of management skill
    • Lack creativity
    • Bad location
    • Legal changes
    • Technology changes
    • Too many competitors
    • Poor services
    • Low quality product
    • Lack of record keeping
  • Local businesses
    Operate in a small part of the country, objectives do not include expansion and do not attempt to obtain customers across the whole country
  • National businesses
    Have branches or operations across most of the country, objectives do not include establishing operations in other countries
  • International/Multinational businesses

    Operate in more than just one country
  • Entrepreneur
    Someone who takes the financial risk of starting and managing a new venture
  • Intrapreneur
    A business employee who takes direct responsibility for turning an idea into a profitable new product or business venture
  • Qualities an entrepreneur is likely to need for success
    • Innovation (creative)
    • Commitment and self-motivation
    • Multi-skilled
    • Leadership skills
    • Self-confidence and an ability to "bounce back"
    • Risk taking
  • Entrepreneur
    Takes the risk, rewards go to the entrepreneur
  • Intrapreneur

    Risks taken by the business, rewards go to the business
  • Major challenges faced by entrepreneurs

    • Lack of a business opportunity
    • Obtaining sufficient (financing)
    • Cost of good locations
    • Competition
    • Lack of a customer base
  • Role of business enterprise in the development of a business and a country

    • Employment creation
    • Economic growth
    • Business survival and growth
    • Innovation and technology change
    • Export
    • Personal development
    • Increased social cohesion
  • Business plan
    A written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts
  • Key elements of a business plan
    • Executive summary
    • Description of the business opportunity
    • Marketing and sales strategy
    • Management team and personnel
    • Operations
    • Financial forecasts
  • factors that affect business in dynamic business environment
    • political & legal issues - gov’ implement new laws and business needs to follow the rules
    • economic issues - economic change and will influence the income of consumer thus demand will change too
    • social issues - increase in a size of a population that affect demand and the type of product people buy
    • technology issues - changes in technology and the speed of internet which will make it easier to find supplier