What's covered
Key facts
Coming up with a business idea
Brainstorming is generating many ideas freely in a group before evaluating them.
Costs, revenue and profit
Selling above the break-even point begins to generate profit.
Researching the market
A small or biased sample can give misleading market-research results.
Sources of start-up money
A drawback of borrowing from a bank is that interest must be repaid even if profits fall.
Why some businesses fail
A business in financial trouble may seek formal help called administration.
Writing a basic business plan
Banks usually ask for a business plan because it shows whether the loan will be repaid.
Coming up with a business idea
A short summary of an idea given quickly is called an elevator pitch.
Costs, revenue and profit
Break-even is the point at which revenue equals total cost.
Researching the market
A small group of customers asked their opinions in detail is called a focus group.
Sources of start-up money
An entrepreneur can get a long-term loan to start a business from a bank.
Practice questions with answers
A taste of the 56 questions in this topic, answers marked. Sign up to practise the full set with spaced repetition.
Which is a good source of business-idea inspiration?
- •Choosing the cheapest product to make
- •Copying the best-selling product exactly
- •Picking a product with no customers
- ✓Spotting a problem in everyday life
What is profit?
- •Just costs alone
- •Just sales alone
- ✓Revenue minus all costs
- •Revenue plus all costs
Which is an example of primary research?
- ✓Asking shoppers about their preferences in person
- •Looking up sales statistics online
- •Reading a news article about a sector
- •Reading a published industry report
Which is an internal source of start-up money?
- •A grant from a charity
- •A loan from a high-street bank
- •An investment from venture capital
- ✓The owner's own savings
Which is a common reason new businesses fail in the first year?
- •Choosing a short business name
- •Having too few staff holidays
- •Opening on a weekday
- ✓Poor cash-flow management
Which section belongs in a business plan?
- •A copy of the owner's passport
- ✓Financial forecasts for the first year
- •The owner's school report
- •The staff canteen menu
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