1.5 Entrepreneurs

Question 1

What are the 4 Factors of Production

Answer 1

Land, Labour, Capital and Enterprise

Question 2

What is Enterprise (Factors of Production)

Answer 2

Role of the entrepreneur is to bring together the other 3 (FoPs) to make a profit

Question 3

Entrepreneur definition

Answer 3

Someone who has a business idea and develops it
Takes risks
Takes the rewards when successful
Takes the losses when it fails

Question 4

Innovation definition

Answer 4

Improving of existing products/service/system/process and the introduction of something better

Question 5

Stages of Starting a Business

Answer 5

Idea
Research
Planning
Financing
Location
Resources
Launch

Question 6

Areas of the Business a Entrepreneur can be Involved in to Expand a Business in the Beginning

Answer 6

Financial Management
Administration
Marketing
Purchasing
Managing People
Production

Question 7

Barriers to Entrepreneurship

Answer 7

Lack of Finance
Lack of of Entrepreneurial Capacity - Skills, Experience and Knowledg
Becoming an Employer - Increased Responsibilities
Legal Barriers
Cost of Compliance
Lack of Ideas
Fear of Failure
Aversion to Risk
Unsupportive Environment

Question 8

Intrapreneur Definition

Answer 8

An employee who is tasked with developing an innovative idea or project within a company

Question 9

Why are Intrapreneurs Important

Answer 9

Drive innovation
Provides the opportunity for self-actualisation (employees reaching their full potential)
Create opportunities for business growth/development
Increase job satisfaction
Increased motivation

Question 10

Entrepreneurs Characteristics and Skills

Answer 10

Characteristics:
Self-confidence
Determination
Self-starting
Judgement
Commitment
Perseverance
Initiative

Skills:
Organising
Financial management
Communication
Managing people
Decision making
Negotiating
IT skills

Question 11

Motives for setting up a business

Answer 11

Be their own boss
Earn their own money/profit
Social reason
Want to hand over something to their children
Work more ethically
Flexible hours or location

Question 12

Financial Motives

Answer 12

Profit maximisation
Profit satisficing

Question 13

Aim definition

Answer 13

What a business what to achieve in the long term

Question 14

Objective definition

Answer 14

Gorals or ar gets a business sets in order to meet their goal

Question 15

Common Objectives

Answer 15

Survival
Profit maximisation
Sales maximisation
Market share
Cost efficiency
Employee welfare
Customer satisfaction

Question 16

What does SMART stand for

Answer 16

Specific
Measurable
Agreed
Realistic
Time-specific

Question 17

Liability definition

Answer 17

Legally responsible for something

Question 18

Limited liability definition

Answer 18

An entrepreneurs risk is limited
Personal assets cannot be used to pay business debts
Only liable for the amount of money that you have invested in the business

Question 19

Unlimited liability definition

Answer 19

Entrepreneur risks their own personal asset
Personally liable for meeting the financial debts on the business

Question 20

Sole Trader definition

Answer 20

A person that sets up a company on their own
Only owner
Unlimited liability

Question 21

Pros and cons of a sole trader

Answer 21

Pros:
Quick and easy to set up
Make own decisions
Keeps the profits

Cons:
Risk of unlimited liability
Works long hours
High level of responsibility

Question 22

Partnerships definition

Answer 22

A type of business that has 2 or more owners
Decide to set up and run a business between them.

Question 23

Pros and cons of a partnership

Answer 23

Pros:
Usually quick and eas to set up
Shared decision making
Shared responsibility for debts

Cons:
Can involve long hours
Can be conflict between owners
Risk of unlimited liability

Question 24

Deed of a Partnership definition

Answer 24

Contract/agreement that outlines what their roles are and how the business will be run
Everyone is quality responsible for the debt

Question 25

Definition of Limited Partnersip

Answer 25

Some partners provide capital but they do not take any part in the management of the business

Question 26

Definition of Unincorporated

Answer 26

When a business is not legally registered as a company which means the business and the owner are seen as having the same identity

Question 27

Definition of a Private Limited Company (Ltd)

Answer 27

It has limited liability Can be small or large

Question 28

Definition of Incorporated business

Answer 28

The process by which a new or existing business registers as a limited company and they announce themselves as a separate entity to the business

Question 29

Pros and cons of a Private limited company

Answer 29

Pro - owners have limited liability, gives individuals the opportunity to be thier own boss, New shareholders need to be invited which protects the business Cons - often more paperwork, in some instances other people are able to view the businesses financial information

Question 30

Definition of Public Limited Company (PLC)

Answer 30

Businesses which are able to sell shares on the stock exchange Anyone can buy stocks from the stock market

Question 31

Definition of Shares

Answer 31

A proportion of the business that someone owns Gives them a proportion of profits and decision making power

Question 32

Pros and Cons of a Public limited company

Answer 32

Pros - raising capital through public issues of shares, widening the shareholder base and spreading risk, growth and expansion opportunities Cons - more regulations to abide by, higher levels of transparency required, ownership and control issues

Question 33

Definition of Stock Marker Flotation

Answer 33

When a business goes public There is an initial public offering which is where shares are released for the first time

Question 34

Definition of Franchise

Answer 34

Chains/branches of a business

Question 35

Definition of Franchisor

Answer 35

Gives permission for an entrepreneur to use their business name, logo and method of working Provide training, materials, marketing tools and other support

Question 36

Definition of Franchisee

Answer 36

They pay the franchiser an initial fee to be able to be allowed to operate under the brand name

Question 37

Definition of Royalty Payment

Answer 37

Money which is paid to the franchisor by the franchisee

Question 38

Definition of Opportunity Costs

Answer 38

Cost of choosing the next best alternative

Question 39

Definition of Trade off

Answer 39

When you cannot have two things at the same time so you have to compromise

Question 40

Definition of Overtrading

Answer 40

When a business expands faster than its capital allows

Question 41

What hold backs entrepreneurs

Answer 41

Adapting the mindset Stress Sharing ownership Lack of leadership qualities/experience

Question 42

How entrepreneurs overcome difficulties

Answer 42

Delegation and trust Earning respect Maturity and experience Education reducing stress