Business unit 1 revision

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Business Studies Revision- Enterprise
Enterprise
Almost any business or organisation can be called an enterprise, but the term usually refers to any process by which new business is formed and new products and services are created and brought to the market. Enterprises are usually led by an entrepreneur Entrepreneur

Individuals who have an idea that they develop by setting up a new business and encouraging it to grow are called entrepreneurs. They take the risk and the subsequent profit that come with success or the losses that come with failure. Characteristic of successful entrepreneurs include:

. Passionate (about their business idea) – This is important motivation and commitment to turn their idea into a successful business . Creative – in order to come up with an idea for a business / new products / services.

. Willing to take responsibility – Entrepreneurs are responsible for organising the resources

. Self-confident – This is important in inspiring confidence in and motivating others, including employees, lenders / investors, suppliers.

. Optimistic – Setting up a business can be tough and not always go according to plan. An optimistic nature will help to ensure an entrepreneur does not give up on the idea they first thought of.

. Willingness to take risks- possibly the most important quality of an entrepreneur, Entrepreneurs often invest their own personal funds in an idea for which there is no guarantee of success.

. Ability to spot and take advantage of opportunities- entrepreneurs should be fast at making decisions and taking advantage of golden opportunities.

The Importance of Risk
The majority of new businesses fail for the following reasons: . Lack of finance
. Skills shortages
. Good idea but poor execution
Calculated risks cannot be avoided in business. Entrepreneurs need to understand where significant risks arise, than asses the probability of the risks happening, this had to be estimated, and then the affects of the risk on cost, cash etc. They should be able to decide whether the potential rewards make the risk worth taking The Importance of Rewards

. Profits
. Capital growth
. Satisfaction
.Control
Opportunity Cost
Opportunity cost is what we sacrifice, the forgone opportunity when we decide to take once course of action over another. I.E. the next best thing that could have been chosen but was not. In business terms, opportunity cost is the value of the benefit(s) of the next best alternative course of action forgone, when making a choice between alternative courses of action

Motives for Becoming an Entrepreneur
. Turn a hobby or an interest into a business
. Achieve and be recognised for their achievement
. Be their own boss and make their own decisions
. To make money
. To provide employment for the local community, sometimes in the form of social enterprises. . To Gain more freedom at work
Government support for enterprise
The government has introduced measure to make it easier to start up in business, to run a business to make a business grow. It has done this by: . Reducing business taxes
. Reducing the regulatory burden on enterprises
. Reducing barriers to raising finance for small businesses
. Improving the support for small and new businesses
. Introducing legislation to promote completion
. Reviewing how to encourage unemployed people to move into-self-employment Generating and Protecting a Business Ideas

Sources of Business Ideas:
. Spotting trends and anticipating their impact on people’s lives- tapping into what is happening in society around us or in a market and responding quickly to these changed . Identifying a market niche- involves noticing something missing in a specific market section or something that can be improved on. . Copying ideas from other countries- Travelling to different countries and discovering different cultures enables entrepreneurs to pick up ideas that have worked elsewhere. ....
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