Knowledge Organiser Topic 1.

1 Enterprise and Entrepreneurship

Added value is the difference between the
Businesses are dynamic. This means they constantly change, they cost of material and the selling price. Value
respond to what consumers want. can be added either by pushing the price up
or by cutting the costs. Usually it is by
Some business ideas are formed by entrepreneurs spotting gaps in adding in a feature that makes the item
the market. Others are formed by entrepreneurs believing they can more valuable to the customer. That
offer better than what already exists. enables the price to be increased.

New ideas come about because of:

Businesses want to make as much money as
1. Changes in technology –
possible, so they need to ‘add value’ to
2. Changes in what consumers want products and services to be able to charge
3. Products / services becoming obsolete (no longer more money.
produced, used, become unfashionable)

The resources that are needed to create goods and

services are called the ‘factors of production’… it is
the entrepreneurs role to organise these factors in
order to meet customer needs.
If
bus I set u
risk iness p a
s/r wha
e
wil ward t
inv l b s
olv e
ed?

Goods and services can both be bought;

however, goods are tangible (physical objects –
Risks Rewards you can touch and feel them), and services are
intangible (non-physical – you cannot touch or
Business Profit feel them).
failure

Financial Business
loss Success

Lack of Independence
security
An entrepreneur is someone who has an idea and takes risks. They manage business
decisions and organise resources.

An entrepreneur needs to be able to turn an idea into a successful business

QUESTION
Skills Qualities
What kinds of things would an entrepreneur need to plan before starting a car wash
business?
Listen well Determination &
Initiative – have a great
idea and want to take it ________________________________________________________________________
to the market
________________________________________________________________________
Good communication Resilient (bouncing back)
– may get many knock ________________________________________________________________________
backs before becoming a
success ________________________________________________________________________
Planning / thinking Hard working – they may ________________________________________________________________________
ahead have to put in MANY
hours at the start ________________________________________________________________________
Organise Willing to take risks – ______
many entrepreneurs
stake everything on their  
idea
Persuade Decisive

Manage Leadership