1.2.2 Entrepreneurial motives

Question 1

Profit

what is its purpose

Answer 1

Difference between sales revenue and costs → acts as a signal in competitive markets, encouraging businesses to create products that customers want to buy

Question 2

profit as an incentive

why is it an incentive

Answer 2

For many, one of the main reasons for creating a business is to make money, improve lifestyle ans secure a good standard of living for themselves and family
- Profit is a reward for entrepreneurs for the hard work and risks they take

Profit rewards entrepreneurs for matching their products to the needs of their buyer and for taking risks.
- Riskier the business → greater prospect of profit has to be to create an incentive to go ahead (eg oil)

Question 3

risks of entreprise

Answer 3

• Consumers may choose not to buy their products
• Tastes and fashion may change
• New, competing products seem better

Question 4

non financial motives

Answer 4

1. ethical stance
2. social entrepreneurship
3. independence
4. home working

Question 5

ethical stance

Answer 5

• Want to do the right thing
• Focus on business providing ethical/environmentally friendly products

Question 6

social entrepreneurship

Answer 6

• Use E skills to achieve benefits for society
• Main aim is to further social and environmental goals

Question 7

independence

Answer 7

• Being your own boss → their decisions affect the outcome of the business
• Being able to achieve a dream/ambition is enough

Question 8

home working

Answer 8

• Many choose to start their own business or become self employed
• Digital tech - office space not needed
• Saves time and money from commuting and can fit in with family routines

Question 9

social enterprise

Answer 9

• Social E run enterprises which have objectives that go beyond and may not include making a profit for their owners
• Have social objectives related to helping other members of society and some have educational objectives, as well trying to change the way we think about certain issues