1.5 Flashcards
What is entraprenur
Entreprenur- a person who is willing to take risks in setting up and growing their own business
What do entrepreneurs do
- Make business decisions
- Organise resources
- Take risks
- Innovate
Intrapreneurship
refers to employees within a business who have the freedom and opportunity to develop their ideas and use creativity to innovate which adds value= comp adv
What most entrepreneurs do when running, developing and expanding business
- Financial management- rasinging capital,managing costs,profitability and cash flow
- Administration- sinurance,legal setup, tax and business records
- Marketing- research,promotion and branding
- Production - production of goods,quality,management and delivery
- Managing people- training,recuritment
- Purchasing, delivery, liaising with suppliers
Barriers to entrepreneurship
- Lack of finace
- Competiton
- Risk
- Lack of ideas
- Lack of skills/knowledge
- Legal barriers
Characteristics and skills of entrareneur
Characteristics of an Entrepreneur
risk-taker, creative, determined, confident, resilient
Skills of entrepreneur
communication, problem-solving, organisation, decision-making
Reasons for Starting a Business
Financial Motives:
-Profit maximisation – aiming for the highest possible profit
-Profit satisficing – making “enough” profit while focusing on other goals
Non-Financial Motives:
-Ethical stance – operating morally (e.g. fair trade, sustainability)
-Social entrepreneurship – solving societal issues via business
-Independence – being your own boss, making your own decisions
-Home working – flexibility, work-life balance
What is a business objective
Medium to long term plans that are established to coordinate the business and act as targets or specific goals
Business objectives
- Survival
- Profit max
- Sales max
- Cost efficiency
- Market share
- Employee ie health and safety Woking environment welfare
- Customer satisfaction eg delivering high quality products
- Social objectives eg addressing social or environmental issues
Influences of business objectives
- Size
- Market
- Ownership
- Owner objectives
Everything about sole trader
Sole trader- A business that has a single owner and has unlimited liability
Adv of sole trader
-They are easy and inexpensive to set up
-The owner has complete control over the business
-All profits belong to the owner
Disadvantages of sole trader
-The sole trader is responsible for any debts the business incurs
-Limited access to finance and capital
-Limited skill set of the single business owner
Everything about partnerhsip
Partnership- Two or more people join together to form a business
Advantages of partnership
-Easy to set up and inexpensive
-Shared responsibilities and decision-making
-More skills and knowledge are available
-Increased access to finance and capital
Disadvantages include
-Partners have unlimited liability
-Profits are often shared equally, regardless of the contribution
-Difficult to transfer ownership
Everything about private limited company
These shares can be sold by the owner, usually to friends and family or to venture capitalists
Decision-making often rests with the person appointed to run the company, often called the Managing Director or CEO
Advantages include
-Limited liability, meaning the owners are not personally responsible for the company’s debts
-Access to greater finance and capital
-Easier to transfer ownership
Disadvantages include
-More expensive and time-consuming to set up
-More complex legal requirements and regulations than sole traders
Capital is restricted
-Shareholders have little control over the company
Everything about public limited
Public Limited Companies (PLC’s): these are normally larger companies. Public Limited
Companies trade their shares on the stock market stock exchange
ADVANTAGES of plc
-Limited liability
-Capital raised from selling shares
-Banks lend money = less risky
-Increased market oresence
DISADVANTAGES of plc
-Increased start-uo costs
-Increased threat of losing control
-Increased legal requirements
-Data is visible to the public
Other Forms of Business
- Online business- e-commerce
- Lifestyle business- business ran in order to sustain a particular lifestyle for owners- linked to owners interests, skill or enthusiasm
- Social enterprise - not for profit and ran to achieve a specific goal or target
-franchising
Franchising franchisor and franchisee
What is franchising
- A limited company that licenses the right for individuals or groups to set up an identical operation in a new region
Franchisor: this is the larger business that is selling the rights
Franchisee: this is the small business owner who is buying the rights
Adv and dis of franchising
ADV for Franchising
- Effective for growing
- Franchisor gets setup fee and royalty payments
- Franchisees get product plans, marketing and brand
- Franchisees get training and support from franchisee
DIS
- Risk of brand damage
- Expensive set up fees and little freedom to change
- Royalty payments, a profit share of sales go back to franchisor
Stock market floatation adv and dis
What is stock market floatatioon
When a company launches on the stock market by becoming a plc and offering shares to the public
ADV of stock market floatatiion
- Use share capital to gain quick capital = able to invest
- Could allow a firm to compete with other businesses more effectively
- May receive positive publicity if performing good
DIS
- Loss of ownership= conflict of objectives
- More vunerable to takeover
- If firm is not making profit people wont buy = less finance raised
Trade off definition
Trade off- situation where having more of one thing leads to less of another
Difficulties in transitioning from entrepreneur to leader
-The need to delegate
-Trust
-Learning to listen
-Developing emotional intelligence
