Enterprise, Business Growth, and Size

Enterprise; Business skills, qualities and willingness to take financial and other business risks
Entrepreneurship; The process of identifying a business opportunity, organizing the resources needed to start and run a business and taking the risks and rewards it involves

Risk Taker; Entrepreneurs’s willingness to take considered risks is vital in business. An entrepreneur is not afraid of failure
Confident; A successful entrepreneur will have a clear belief in their own abilities and ideas. Someone who lacks confidence will be unable to convince investors, banks, suppliers and customers.
Hard-working; Many entrepreneurs have to work long hours,a t weekend and during holidays
A good communicator; An entrepreneur must be a clear and confident communicator when sharing ideas with investors and when promoting their business

The contents of a business plan;
- Aims and objectives of the business
- Description of the goods and services it will offer
- A plan for how and where production will be organised
- The resources the business will require
How do they assist entrepreneurs
- It evaluates weather it is possible to turn the idea into a business
- It sets out what and how things needs to be done and when to achieve objectives
- It monitors how well the business is performing against the plan

Why do government support starts-ups
- They reduce unemployment
- It can boost economic growth
- It can encourage social enterprise (enterprises that help the environment)
How do governments support starts-ups
- Grants; Non-repayable sums of money to help fund the business. Can be used for equipment, training and employing workers
- Low-cost loans; Loans of money repayable at a low rate of interest. Can be used for equipment, training and employing workers
- Training schemes; The government pays the cost of training a new employee. It can help increase the skills and knowledge of the employees

Number of Employees
- Firms with less than 50 employees are considered small. However not all large firms employ lots of workers
- LIMITATIONS; Some large firms are capital-intensive and employ few workers using more machinery
Capital Employed
- The money invested in the productive aspects of the business by its owners.
- LIMITATIONS; Some large firms may be labour-intensive and therefore their production requires a large employment and little capital
Output or Sales
- How much output firms produce (Number of products or revenue)
- LIMITATIONS; A major shipbuilding company may produce one large product per year while a bakery will produce thousands of cakes
Market Share
- The proportion of total sales of a product achieves by one firm
- LIMITATIONS; Not all markets are big. A local business may be very small in terms of market share, but very big in the local city.

Banks may be willing to lend more money
Suppliers of material may give discounts to large businesses buying these items in bulk
A large firm may have more financial resources to invest more in machinery
Business managers can increase their salaries

Internal Growth; A business expands its existing operations. Equipment, employees, location. Slow but easy to manage
External Growth; When a business merges or takes over another business. Also known as integration. It can happen in many different ways
- Merger; Two or more businesses joining together
- Takeover; When a company buys enough shares to take ownership of another business. May happen without the agreement of all owners
  - Horizontal Integration; Involves businesses engaged in the production of the same types of goods or service. This is the most common
  - Vertical Integration; Involves businesses at different stages of production. Car manufacturers + Car retailer
  - Lateral Integration; Involves businesses in different industries in the same or different stage of production. Also called conglomerate merger

Managing a large firm can be difficult especially if the firms is spread in different locations
- Have local managers at each business and communicate with meetings
Large firms may need a large quantity of materials and components
- Expand more slowly and buy in bulk
Large firms may be unable to attach workers with the right skills therefore a lot of money must be spent on training
- Expand more slowly and adopt capital-intensive production methods

The size of the market is small (local population is low therefore customer numbers don’t increase)
Access to capital is limited (personal problem and credibility in banks is low)
Some business may decide to remain small (Profit is good and running a large business is hard)

Lack of management skills
- Not everyone has the skills required or the money for courses to be a good manager
Changes in the business environment
- Business unable to adapt to changes may be affected by this
  - Changed in customer preferences
  - Increasing competition
  - Failure of major customers
Liquidity problems
- Happens when a business is unable to pay its employees, suppliers and other running costs