What is business failure?

Business failure is when a business has to close because it cannot pay its debts or make enough money. Many start-ups fail within their first few years.

Explain what is meant by financial loss for an entrepreneur.

Financial loss means losing money when costs are greater than revenue or when the business closes. An owner may lose personal savings put into the business.

Why does starting a business mean a lack of security for the owner?

An employee receives a regular wage, but an entrepreneur's income depends on how well the business does. Some months may bring little or no income.

What is meant by reward in business?

Reward is the benefit an entrepreneur gains for taking a risk. Rewards include business success, profit and independence.

Edexcel GCSE Business 1BS0

Enterprise and Entrepreneurship

Topic overview The dynamic nature of business Risk and reward The role of business enterprise

Spotting a Business Opportunity

Topic overview Customer needs Purpose and methods of market research Market research data and its reliability Market segmentation The competitive environment

Putting a Business Idea Into Practice

Topic overview Business aims and objectives Business revenues, costs and profits Cash and cash flow Sources of business finance

Making the Business Effective

Topic overview Business ownership and limited liability Franchising as a start-up option Business location The marketing mix Business plans

Understanding External Influences on Business

Topic overview Business stakeholders Technology and business Legislation and business The economy and business Responding to external influences

Growing the Business

Topic overview Organic and inorganic business growth Public limited companies and finance for growth Changes in business aims and objectives Business and globalisation Ethics, the environment and business

Making Marketing Decisions

Topic overview Product design, life cycle and differentiation Price and pricing strategies Promotion strategies and technology Place and methods of distribution Using the marketing mix to make business decisions

Making Operational Decisions

Topic overview Business operations and production processes Working with suppliers Managing quality The sales process

Making Financial Decisions

Topic overview Profit, profit margins and ARR Understanding business performance

Making Human Resource Decisions

Topic overview Organisational structures and communication Different ways of working Effective recruitment Effective training and development Motivation in the workplace

Enterprise and Entrepreneurship

Risk and reward

3 things to know
Paper 1

Overview

The risks of starting up, from failure and financial loss to losing a regular wage, the rewards of profit, independence and success, and how an entrepreneur weighs one against the other.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

Name three risks an entrepreneur faces when starting a business.

Key term

State three rewards of running a business.

Key term

What is meant by risk in business?

Questions from this subtopic

Each one with the model answer underneath.

1
What is meant by risk in business?
Model answer
Risk is the chance that a business decision leads to a bad outcome. A new business risks failing and losing the money invested in it.
2
Name three risks an entrepreneur faces when starting a business.
Model answer
The business could fail. The owner could lose money. The owner loses the security of a regular wage.
3
What is business failure?
Model answer
Business failure is when a business has to close because it cannot pay its debts or make enough money. Many start-ups fail within their first few years.
4
Explain what is meant by financial loss for an entrepreneur.
Model answer
Financial loss means losing money when costs are greater than revenue or when the business closes. An owner may lose personal savings put into the business.
5
Why does starting a business mean a lack of security for the owner?
Model answer
An employee receives a regular wage, but an entrepreneur's income depends on how well the business does. Some months may bring little or no income.
6
What is meant by reward in business?
Model answer
Reward is the benefit an entrepreneur gains for taking a risk. Rewards include business success, profit and independence.

See the rest and revise

Other ways to work this

The same content, four other ways.

What is inside Levo

Six ways to work the same material.

1Closed book

2Open book

3Closed book

The 3-step method, run for you

Answer cold, learn it, then prove it stuck. Levo tracks the jump between your first attempt and your last.

Enterprise and Entrepreneurship

Spotting a Business Opportunity

Putting a Business Idea Into Practice

Making the Business Effective

Cram a whole paper in one sitting

Sort every topic into what you know and what you do not, then drill only the weak ones.

Revenue = price × .

quantitycostprofit

Blank Blitz makes facts automatic

Rapid timed gap-fills on the terms and numbers you need to recall without thinking.

AGoods must be of satisfactory quality.

BGoods must be fit for purpose.

CGoods must be as described.

Build It gets the exam shape right

Assemble a full-mark answer from its marking points, in the order an examiner wants them.

Cash inflows means money coming into a business.

TrueFalse

Test It catches misconceptions

Spot the fault in a statement. The traps are the mistakes students actually make.

721941163128510

Brain Breaks between sessions

Short focus games to reset attention, so the next set lands better than the last.

Every question in Enterprise and Entrepreneurship, on a schedule.

Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.

Start revising, £5 a month See how the method works

Or £46 a year, about £3.83 a month. Cancel anytime.