Entrepreneurship Flashcards

• These flashcards cover key concepts of entrepreneurship and small business management.

Franchises

• A benefit of buying a franchise is receiving support and training, which reduces the likelihood of poor business decisions and failure.

Market Segmentation

• Small businesses can use market segmentation, such as targeting products based on gender, to meet the specific needs of different customer groups.

Employment Law

• Employment law covers areas such as discrimination and health and safety.

Non-Financial Aims

• A non-financial aim for entrepreneurs is independence, allowing them to make their own decisions.

Qualitative Data

• A disadvantage of qualitative data is that it is based on opinions, which can vary greatly and make it difficult to judge customer preferences.

Customer Needs

• Understanding customer needs allows a small business to improve product quality, gain a competitive advantage, and increase market share.

Importance of Cash

• Access to cash allows businesses to pay suppliers on time and avoid insolvency.
• Without cash, businesses may struggle to pay wages and rent, potentially leading to closure.

Rewards From Business Activity

• Independence is a reward from business activity.

Trade Credit

• Trade credit is a low-cost source of finance, where no interest is charged if credit terms are met, reducing business costs.

Secondary Market Research

• Internet research and market reports are examples of secondary market research.

Partnerships

• A disadvantage of a partnership is potential disagreements between partners, which can hinder decision-making and the ability to meet customer needs.

Marketing Mix

• A small business might change its prices due to economic conditions affecting consumer income so consumers still feel they are getting value for money.

Reducing Risk

• To reduce risk, entrepreneurs can carry out market research to understand customer needs and develop products/services that customers are likely to buy.

Adapting Products

• Entrepreneurs may adapt existing products because the business already understands the market and may have existing market research to better understand customer needs.

Focus Groups

• The original content did not provide an answer to this question

Increased Interest Rates

• An increase in interest rates may decrease customer disposable income, as they pay more for loans, leading to a fall in demand.

Impact of Employment Laws

• New employment laws may increase costs for employee training and wages.
• Training courses and increased minimum wage requirements can lead to higher expenses for businesses.

Adding Value

• Value can be added by increasing the convenience, creating a unique selling point (USP), improving design or quality, enhance branding, or providing faster service.

Reducing Risk

• Risk can be reduced by conducting detailed market research, creating a business plan, and securing sufficient start-up finance.

Importance of Market Research

• Market research identifies customer needs, understands competitors, and identifies gaps in the market.

Advantages of Market Segmentation

• Market segmentation helps target market activity and meet specific customer needs.

Drawbacks of Market Segmentation

• It can be difficult to identify key groups, reach chosen groups, maintain segment interest, and meet the needs of customers not in the chosen market segment.

Financial Objectives

• Financial objectives include survival and increasing market share.

Reasons for Finance

• Finance is needed to expand the business and invest in new products/services.

Advantages of Sole Trader

• Sole traders keep all the profit and their financial information is private.

Disadvantages of Sole Trader

• Sole traders find it harder to raise finance and face a lot of pressure as one person.

Advantages of Partnership

• Partners bring wider expertise and prior knowledge of the market.

Advantages of Ltd (Private Limited Company)

• Ltds (Private Limited Companies) can raise finance to establish or grow the business more easily

Disadvantages of Ltd (Private Limited Company)

• Shareholders may disagree and financial information is published.

Disadvantages of Running a Franchise

• The initial investment can be high and there is little freedom to make decisions.

Drawbacks of Consumer Law

• Changing products and practices to comply with consumer law can be costly, and non-compliance can lead to bad publicity.

Benefits of Consumer Law

• Good publicity and a reduced risk of fines or lawsuits can result from following consumer law.

Drawbacks of Employment Law

• Meeting health and safety regulations and paying the national living wage can increase business costs.

Benefits of Employment Law

• Motivated employees and reduced recruitment costs due to fewer employees leaving can result from following employment law.

Impact of High Demand/Economic Activity

• Inflation may rise, consumer incomes rise, and the pound is stronger.

Impact of Low Demand/Economic Activity

• Consumer incomes fall, inflation may fall, unemployment may rise, interest rates may fall, and the pound may become weaker.

Threats – External Influences

• Threats include new competitors entering the market and a fall in economic activity.

Opportunities – External Influence

• Opportunities include a rise in economic activity and lower interest rates that make it easier for businesses to borrow money.

Responses to External Influences

• The original content did not provide an answer to this question