Chapter 3 - Enterprise, business growth & size

________- able to choose how to use time and money.

________- lost income from not being an employee of another business.

________ depends on efficiency & skills of managers as well.

________ to plan for change: Changes in the business environment- technology, competition, economy- risk /uncertainty.

A(n) ________ is a person who organizes, operates & takes the risk for a new business venture.

________: One business takes over another business that comes after it in the chain of production.

________- where to put savings for a good return.

________- creates new jobs.

________- comparing other firms, usually in the same industry.

________ is when one business merges with or takes over another one in the same industry at the same stage of production.

________- supports disadvantaged groups.

________- contributes to countrys economy.

________: Lack of management skills and experience- Bad decisions (location, managers, promotion & products)

________: shortage of cash (liquidity problems)- can not meet obligations (suppliers /government /landlords /bankers)

________: More difficult to survive if new- need adequate financial resources, planning research, experience, decision- making skills.

Forward ________: One business takes over another business that comes after it in the chain of production.

________: One big business integrates with another, smaller business, in a completely different market.

________- lots of manual labor requiring many employees.

________- consumers have more choices.

________- entrepreneurs will have to put their own money into the business & find other sources of capital.

able to choose how to use time and money

many new entrepreneurs businesses fail

entrepreneurs will have to put their own money into the business & find other sources of capital

lost income from not being an employee of another business

careful planning reduces risks of failure

creates new jobs

consumers have more choices

contributes to countrys economy

supports disadvantaged groups

become important in the future

where to put savings for a good return

different tax rates for small/large businesses

comparing other firms, usually in the same industry

To have some idea of how many people are working with them

How important a loan might be compared to its overall size

lots of manual labor requiring many employees

total costs

One business takes over another business that comes after it in the chain of production

One business takes over another business that comes after it in the chain of production

One big business integrates with another, smaller business, in a completely different market

ensure sufficient long-term finance

businesses are likely to stay small

An entrepreneur is a person who organizes, operates & takes the risk for a new business venture

1. Freedom to choose how to invest time and money. 2) The ability to put down own ideas into practice. 3) Fame and success if business grows. 4) May become profitable & income might be higher than being an employee. 5) Ability to make use of personal income & skills

1. The risk, as many new businesses fail. 2) Entrepreneurs must put their own money into the business. 3) Lack of knowledge & experience in starting & operating a business. 4) Lost income from not being a employee of another business

1. What products/ services to provide. 2) Which market share I aim. 3) Future Business Plan. 4) Cash flow. 5) Business' main costs. 6) Location. 7) Resources required (machinery, finance, people)

1. Reduces unemployment. 2) Increases competition. 3) Increases the country's output. 4) Benefits society. 5) Can grow further & become important in future

Investors, Government, Competitors, Workers, Banks

revenue minus total cost

Internal growth. Mergers, takeovers, buyouts. Horizontal integration, vertical forward/backward integration & conglomerate integration

When two or more companies agree to become one united company

Purchase of the controlling share (>50%) in another business

The purchase of one firm by another

Horizontal integration is when one business merges with or takes over another one in the same industry at the same stage of production

Businesses at different stages of production integrate.

One business takes over another business that comes after it in the chain of production. This moves closer to the consumers

One business takes over another business that comes after it in the chain of production. This moves further away from the consumers

One big business integrates with another, smaller business, in a completely different market.