DIP – Tutorial 3. solutions Lim Sei cK

1) True or False: Large businesses such as Marks & Spencer and Heinz were started by a large group of people. FALSE. They were started by either one person or a small group of people.

2) Explain the four main types of business: manufacturing, wholesale, retail and service. Manufacturing – production of goods, in which raw materials are transformed into finished goods Examples: Kingston, Aewon Wholesale – sale of goods (large quantity) to retailers Examples: Malar Setia, Ben Food

Retail – the sale of goods and services for businesses to customers Examples: HuaHo, SKH Service – Economic activity that is intangible, is not stored, and is consumed at the point of sale Examples: Saloon, Gym

3) Define ‘entrepreneur’. Apart from what has been listed, what are some of the characteristics of the successful entrepreneurs? Entrepreneur is an individual who takes initiative, risk in return for possible returns; Individual who organizes or operates business activity Characteristics: innovative, risk-taker, creative, passionate, ambitious

4) List down the name of three entrepreneurs and their enterprise. Simon Woodroffe – Yo Sushi Restaurant Henry John Heinz – Heinz Anita Roddick – The Body Shop

5) What are the benefits of running a small enterprise? Explain. Keep all the profit. Makes all the decision. More time (freedom)

6) What are the challenges of running a small enterprise? Explain. Lack of funds Lack of expertise Lack of resources Major risks involved

7) True or False: Planning is the first step to a successful business. TRUE. If you fail to plan, you plan to fail.

8) Why do you think making profit is important for any businesses? If a business runs out of cash and is not able to obtain new finance, it will become insolvent. Without profit employees cannot be paid, suppliers cannot be paid, and therefore the business will grind to a halt.