As business chapter 1 summary

Enterprise: process by which new businesses are formed and new products and services are brought down to the market.

Entrepreneurs: individuals who form the business and makes it grow and takes financial risks.

Enterprise skill: skill that allows individual or organisation to respond effectively in changing market situation( for example change in prices) understanding the risk, thinking and acting wisely.

Characteristics of successful entrepreneur:

- passion
- making decisions and persistence
- ability to spot and take advantages of opportunities
- skills and expertise
- creativity, vision and creation
-willingness to take risks.

The importance of risks and rewards such as profit:

Failure occurs:
- lack of finance
- skills shortage
- complexity of regulations
- poor infrastructure

Most entrepreneurs are happy to take risks if the rewards are great enough. This depends on them doing researches to minimize their failure. Outcome of taking risks is profit.
For example Dragonsden takes risk by investing their money for another businesses.
also one of the most important characteristics of an entrepreneur is to learn from their mistakes and try again.

The notion of opportunity cost

Opportunity cost: cost of the next best alternative foregone.

Sometimes we need to choose and we need to make the best decisions.

Motives for becoming an entrepreneur

More people are interested in setting up business, because:

- long-term low interest rates, makes easier to borrow money for star-ups.

-change in the political climate, so the government supports start-up businesses.

- increasing wealth, which often means that people start to look for meaning in their lives.

Government support for enterprises and entrepreneurs

Government support enterprises because they increase productivity, employ people, which means to reduce unemployment and many other reasons. They encourage growth, makes economy grow if they are successful. New and more dynamic business causes an increase in competitive pressure in markets, with new ideas, technology and more efficient working practices.

Government has made measures to make it easier to start-up and run a business, and to support a growing business. It has done this by:

- reducing the taxes, trying to establish modern tax system.

- reducing barriers for raising finance for small businesses.

- improving support for small and new businesses.

- Making law to promote competitions.

- giving financial support for voluntary and non-profit organisations that are doing excellent work.