BUSINESS STUDIES ( Chapter 3 - Enterprige, Business Growth and Size )
Enterprige and Enlroprencurship
= entrepreneur - A perion who enganives, operates and takes the risk for a new buisness venture,
+ Advantages:
al Independenae ui) Mere proitale
B Werk on oun ideas ) Make ute of personal interests and akils
oc] Fame and supeeuo when busines cue
= Dincdhertges:
al Risk of failure 1 Lack of krouledge a experente in ataing and operating a busines
BL Quin eopital a itk af Irconsetnt monihly nome
+ Characters of sues entreprenurt:
al Harduerking e) Se confident
Bb) Rick tnkor Alrnowtive
e) Creative ahlndeperdent
al) Optimists HY Effective nonmarioator
Why Goverrmerta Support Business Sar-upa
Naw businesses wl ero joi the wl lp reduae empleumn
~ New tusresues wl ge consumers more etn and inereage congestion with deady extablhed businentes.
+ New businesses al help the ezoncmy benef fom te neeaued ong of products.
+ New businesses may grow to became very large ard important bugineaues in the Future
What Sueport Gouerenanta Que to Start-up Busressea
+ Butea dean and help - by organising achive and auppoet secsine oflared by experinsed busines people
+ Promises ~ with “enerrie zones” whch prowde wr ostpreniues fo str-up usnessen
= Finante - loans at low interest rates
+ Latour - grants ta tran erpkyoes and hep inereage ter produetity
+ Reasarch~ entourage uveitis to make ther research fates auslale to rew bus entrepreneurs
Business Plana
+ Vin 2 duran! containing the busross ebjocivon and irperion dette about the operaions, Finance and ounere ofthe naw business.
= Elements
al Typec! busineas ergarisation Al Location of business
H) Busineseebjestien 1] Preduoin details and business conta
#) Good /Senvce 1 Forecast profit
Target market iI Gash few
1] Hhrnan resoures flan ji Frante
+ Abank ull ours ak an ennepreneur fr @ butineas plan bere agreeing toa loan or avrdkaftto hla fnange the new busin
+ Without a business pla, the Bark wl be retard ald mney to he busines aa i tanec chew that thay have ahouht rouly
about the future.
Comparing Business Gos
+ Fim ean be owned ad run by a single individual, crt canhavs hundreds of thousands of workers lover the weld
= Irveitars, governments, banks, oeripetiers and workers wauld find it usefl to cornpare- business Sizes
+ Busines cies oan be meqaured by the rune of employees, value of cult, hse of sabe and ve of capital employed Hat al ae
adartages ond linations
+ capital omplaypd [tis the toll usu of pital usa in tho businessPabvrtages:
+ hereental integration
al The merger redunes cempetiton is the industry.
1 The combined busines ull have abigger share of he tcl marks.
+ forward vera integration
al The merger gives an assured cae! for fei prec.
bl infermation about consumer needs and preferenes can now ke obtained direoty by the manufacturer.
+ baokuard vertical integration
al The merger given an ataured supply of mpertare components,
Costs of cormponent and supp fr the manafaturer could be contd
+ conglomerate integration.
al The busines would have drafed ts ooites ard thi ul epead the ras ten by the businaas.
1 There might be a transfer af ideas between the diffrent suoions of he business eventhough they operate indifferent industries,
Discthantages:
‘al hard to eantral, 26 qperate business in anal unite (farri of deventralisatice)
1) poor eammurication, ao operate business in ara units
tl expan i ctl, oo do it uly ard use prof for arthur grout
Why Some Businanses Stay Sral
+ They offer persnal servinea/ penile proc
= lV a eifou offer the close ard personal arviee derinded by acrsunere if he business to large
Tho marke iz in uma
~ Onecare interested in keeping cartel of a ail business and ring a of thet tf ar earner.
+ Ouiners wich to sunid the strooe and worry of expanding the business.
luhy Some Businesses Fal
+ Poor management - Lack of experience can lead to bad decisions, ike loeating the business in an area with high eoste but lou demand.
- Faire to plan fr change -New technology, powerfd new competitors and majer economic theres ean lea to business fares f rot
resperded fo efoto
~ Poor fnarcia management ~ Skorage of eth mesns that werer, supply, landlords ard more caer be psid uhst they are ued
+ Over-expanion - When it exparde too quickly, it can lead 4 big problns of management and finance
~ Riska ef ew business startup ~ The gwner may lack the expenerce ard decision making sil