Term
Enterprise
What is enterprise?
Answer
Definition
The skills and willingness to set up and run a business, taking risks to make a profit.
This module outlines the foundational concepts of enterprise, ownership types, financing methods, and inherent risks.
Keep track of your study goals for this chapter.
Essential definitions required for understanding business structure.
The Business Plan: Effective enterprise requires a business plan outlining business purpose, market research, marketing strategy, and financial projections. A well-prepared plan improves chances of success and attracting finance.
A summary of the core reasons entrepreneurs start businesses.
Successful entrepreneurs typically demonstrate these key characteristics.
| 1 | 2 | 3 | 4 | 5 | 6 |
|---|---|---|---|---|---|
| Risk-taking | Initiative | Creativity | Leadership | Resilience | Decision-making skills |
What is enterprise?
The skills and willingness to set up and run a business, taking risks to make a profit.
Who is an entrepreneur?
Someone who identifies business opportunities, organizes resources, makes decisions, and accepts risks to create and grow a business.
Name three reasons for starting a business.
To be own boss, earn money, pursue a passion/hobby.
What is a sole trader?
A business owned and run by one person with unlimited liability.
What liability does a sole trader have?
Unlimited liability, meaning personal responsibility for business debts.
What defines a partnership?
A business owned by two or more people sharing decisions, profits, and losses.
What is a private limited company (Ltd)?
A separate legal entity owned by private shareholders with limited liability.
What is a public limited company (PLC)?
A company that sells shares publicly on the stock market and is heavily regulated.
What distinguishes social enterprises?
They reinvest profits into social or environmental goals instead of maximizing profit.
Name one advantage and one disadvantage of a sole trader business.
Advantage: Full control; Disadvantage: Unlimited liability.
What motivates entrepreneurs?
Independence, financial rewards, recognition, solving problems, social impact.
Name two sources of business finance.
Personal savings, bank loans.
What risks might new businesses face?
Financial risk, market risk, operational risk, legal risk, reputation risk.
What key skills do entrepreneurs commonly have?
Risk-taking, initiative, creativity, leadership, resilience, decision-making.
What is the benefit of business planning?
Improves success chances and helps attract finance.
How can a sole trader expand their business structure?
By forming a partnership or converting into a limited company.