FOUNDATIONS OF BUSINESS
Q: What is the difference between a need and a want?
A need is essential for survival; a want is something desirable but not essential.
What is an entrepreneur?
A person who takes the risk to start and run a business.
Name the three sectors of industry.
Primary, Secondary, Tertiary.
What is meant by “business growth”?
Increase in output, revenue, employees, or market share.
What is a partnership?
A business owned by 2–20 people who share profit and responsibility.
Define consumption.
The process of using goods and services to satisfy needs and wants.
Name ONE characteristic of a successful entrepreneur.
Motivated, creative, risk-taker, confident, innovative, effective communicator.
Example of a secondary sector activity?
Manufacturing clothes, car production, furniture making.
Name ONE internal method of business growth.
Opening new branches, increasing output, launching new products.
Give one advantage of a partnership.
Shared skills, shared workload, more capital.
Identify TWO examples of capital in a business.
Machines, tools, vehicles, equipment, buildings.
What does specialization mean in business?
When individuals or businesses focus on one part of the production process.
What is industrialization?
When an economy moves from primary to secondary sector dominance.
Why do some businesses choose to remain small?
Niche market, personal customer service, owner preference, limited funds.
Give one disadvantage of a partnership.
Unlimited liability, disagreements, sharing profit.
What is opportunity cost? (Bonus crossover from earlier concepts)
The next best alternative given up when making a choice.
Why is adding value important for a business?
It increases profit and makes the product more attractive to customers.
What is de-industrialization?
Decline of manufacturing and growth of services.
State TWO causes of business failure.
Poor cash flow, lack of planning, competition, economic downturn, bad management.
What is a business plan?
A written document that outlines business objectives and how to achieve them.
List the four factors of production.
Land, Labour, Capital, Enterprise.
State TWO ways the government supports business start-ups.
Grants, loans, training, tax incentives, advice, low-rent units.
Why do some countries have a large tertiary sector? Give TWO reasons.
High income levels, improved education, demand for services, developed economy.
How can you measure the size of a business? Name TWO methods.
Number of employees, revenue, market share, capital employed.
Why is a business plan important for new businesses? Give TWO reasons.
Helps secure finance, reduces risks, sets clear objectives, guides operations.