1.1.1 & 1.1.2 Dynamic nature of business & risk and reward

A budding entrepreneur who is looking to set up a new enterprise is concerned that the business might not provide enough of a stable income to maintain his current standard of living. Which of the following best describes this risk?

• Inability to break even

• Lack of security

• Business failure

• Lack of independence

Sara decided to start-up a business as a personal trainer, due to her passion for fitness.

Which of the following is the main reason behind Sara’s business idea?

• Earn more money

• Pursue an interest

• Be her own boss

• Work more flexible hours

Increased concern from consumers over the environment has led to new business start-ups developing products from recycled materials. These business ideas have come about due to:

• Services that have become obsolete

• Products that have become obsolete

• Changes in consumer demand

• Changes in the interest rate

Which of the following statements best describes the term, reward?

• The probability that something will go wrong

• The chance of loss or damage

• When a hoped for outcome does not happen

• The benefits gained through business activity

An entrepreneur has developed a unique product to launch into the market. Which of the following best describes how this new business idea came about?

• An original idea

• Adapting an existing product

• Adapting an existing service

• Adapting an existing idea

Which of the following is a financial reason why an entrepreneur might start-up a new business?

• To make a profit

• To pursue a skill or interest

• To have more freedom in decision-making

• To achieve a work-life balance

Which of the following best describes the term, obsolete? When consumers:

• Demand more of a particular product or service

• Want, and can afford, to buy more products and services

• Can no longer afford to buy a particular product or service

• No longer want to buy a particular product or service

Lack of overall planning and poor decision-making can lead to business failure. This is known as:

• Poor management

• Poor quality

• Poor understanding of the economy

• Poor sales levels

An entrepreneur has produced a shaving oil for customers with sensitive skin to eliminate any pain when shaving. This is an example of a business idea that:

• Was developed and delivered to the market quickly

• Solved a customer problem

• Offered a cheaper way of doing something

• Is aimed at a fast growing market

A product or service is obsolete when sales:

• Start to rise

• Rise rapidly

• Growth slows

• Fall or come to an end