1. AS Business Studies Enterprise and Entrepreneurship

2. Aims and Objectives Aim: Understand opportunity cost and the importance of small businesses in the UK. Objectives: Define and explain opportunity cost Describe problems entrepreneurs face when setting up a business. Analyse the importance of small businesses in the UK.

3. Starter Define entrepreneurship. Give 3 characteristics of entrepreneurs. Explain 4 motives for becoming an entrepreneur.

4. Opportunity Cost Definition: The cost of missing out on the next best alternative when making a business decision. What is the opportunity cost of the following: 1. Buying a new Audi sports car. 2. Choosing to go to McDonalds 3. Hiring a man from a rival company. 4. Buying a new piece of machinery. 5. Investing in Tesco

5. Opportunity Cost Every choice made by an entrepreneur has an opportunity cost. Entrepreneurs will look at all alternatives before deciding. However entrepreneurs do not always make the best decision! E.g. when a start up business borrows money, it gets charged interest. The loss of this money is the opportunity cost, because if the money had not been borrowed, then cash made by the business could go straight back into the business instead of on interest.

6. How Important are entrepreneurs to the UK economy? Start up businesses are usually small. Small businesses are therefore important to the UK because they are the start of large businesses. Small businesses can be defined as follows:  Fewer than 50 employees  Sales less than £2.8 million However a small business could be big if it is in a small market. (Big fish in a small pond).

7. Type of Industry Number of Businesses Total Number of Businesses in Industry 0-4 Employees5-9 Employees 10-19 Employees 20-49 Employees Construction159,92521,63510,9706,595202,625 Retail166,43062,45028,83513,180278,040 Hotels and Catering 75,57032,29522,79013,510151,625 Total All Industries 1,391,960317,745178,820120,870 Total All Businesses 2,084,495 Define a small business. (2 Marks) Calculate the percentage of construction businesses that could be classified as small. (4 Marks) From the data above, assess the importance of small businesses in the three sectors. Use percentages as in question 2 to help you with the answer. (6 Marks) To what extent does the above data show that small businesses are the most important part of the UK economy? (8 Marks)

8. Problems Facing Entrepreneurs Hard to get finance if business idea is risky. BC

9. Gaining Help as an Entrepreneur Small businesses are vulnerable when first setting up and many fail. Government grants are sometimes awarded to different businesses for different purposes: Innovation, Research and Development Training Economic regeneration Encouraging young people to start their own business

10. Plenary Define opportunity cost Describe how important small businesses are in the UK. Explain 4 problems entrepreneurs face when starting a business.