1.1 Entrepreneurship
three kinds of rewards that motivate entrepreneurs
profit, satisfaction / business success, independence
define viable
able to work properly or sucessfully
4 examples of non-financial objectives
personal satisfaction, challenge, independence, control
define limited liability
level of risk is limited to amount invested in the business
define inflation
three risks of starting a business
business failure
financial loss
lack of security
the 4 main customer needs
price, quality, choice, convenience
define fixed costs
do not change, no matter how many products a business sells
define franchisee
an entrepreneur who pays a fee to trade using the name and products of an established business
one effect of a rise in interest rates
businesses and consumers will cut back on spending
two ways to add value to a product
new features, design, innovate, expert advice
two methods of makret research
interviews, surveys, focus groups
define variable costs
cost that changes with output (sales)
product, price, place, promotion
define interest rate
the price of money; the cost of borrowing
name 3 roles of entrepreneurship
organise resources, make business decisions, take risks
4 kids of market segments
define margin of safety
how much sales can fall before the break-even point is reached.
define partnership
a business owned by teo or more people who share the financial risk and decision-making
name 6 groups of stakeholders
two ways business ideas come about
advances in technology
changes in consumer wants
difference between a direct and indirect competitor
Direct competitors offer identical services. Indirect offer close substitutes.
define break-even point
when total revenue = total costs
define franchisor
an established business that gives permission to a entrepreneur to trade using its name
one effect of a rise in the value of the pound
imports become cheaper
exports become more expensive