Define the term business enterprise.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2023). The mark or mark type is shown in brackets.

1. [2] (a) Business enterprise is often defined as someone who spots a business opportunity and sets up a business – an entrepreneur
2. [2] (a) Business enterprise is also defined as any business activity that makes/sells products that make profits and contributes to economic development – job creation, GNP in a city or country – both interpretations are acceptable
3. [2] (a) Risk taking ability that brings together all factors of production to set up a business
4. [2] (a) Entrepreneur activity that sets up businesses to make profits/products/sells to customers
5. [2] (a) Any organisation that sells products to satisfy customers
6. [2] (a) The skill and ability to start up/manage a business
7. [2] (a) A business with the aim of making profit rather than meeting social objectives
8. [1] (a) One of the factors of production
9. [1] (a) A business that makes profits
10. [1] (a) A partnership or limited company/an organisation
11. [1] (a) An entrepreneur
12. [1] (b) Business failure is when a business ceases to operate
13. [1] (b) Lack of cash
14. [1] (b) Insufficient working capital
15. [1] (b) Poor business model
16. [1] (b) Poor managers
17. [1] (b) Competition
18. [1] (b) Too few customers
19. [1] (b) Poor marketing
20. [1] (b) Business inflexible.
21. [1] (b) Lack of financial control – cash flow forecasts are inadequate or not used – unable to negotiate cash shortages
22. [1] (b) Poor cash flow management – insufficient working capital to survive
23. [1] (b) Business model is defective – demand for niche product falls – no alternative product
24. [1] (b) Management and leadership inadequate – lack key skills and experience to make appropriate decisions
25. [1] (b) Competition too strong – business fails to respond to aggressive competition -offer on price or quality is inferior to competition
26. [1] (b) Failure to attract and retain customers – may be dependent on a few big customers, or a limited niche market segment
27. [1] (b) Marketing is weak – poor market research at outset – marketing is under resourced
28. [1] (b) Economic, legal, social, market changes – business unable to respond – lacks agility and flexibility