1.5 entrepreneurs Flashcards
What are the three roles of an entrepreneur?
-Make business decisions
-Create and set up a business
-Running and expanding a business
What are some examples of characteristics an entrepreneur should have?
-Financial skills
-Persuasive
-Problem-solving skills
-Creative
-Risk taker
What is intrapreneurship?
Promotion of entrepreneurial thinking and behaviour within a business
What is the role of an intrapreneur?
They work within a large organisation and think creatively, willing to take risks to innovate for the business
What are two advantages of promoting intrapreneurship within a business?
-New products are likely to be developed
-Increases motivation
What are four barriers to entrepreneurship?
-access to finance
-lack of know-how
-fear of failure
-entrepreneural capacity
What is entrepreneurial capacity?
refers to an individual’s ability to think creatively, take risks and identify business opportunities
What is the difference between uncertainty and risk?
Risk can be calculated for but uncertainties cannot
What are three reasons why a person would set up a business?
-profit maximisation
-independence
-social entrepreneurship
What would be a common business objective for a startup company?
survival and enough cash inflow to keep themselves in business
What may be a business objective for an established business?
Profit maximisation, making the most amount of profit in the least amount of time
What are three other business objectives?
-Market share
-Cost efficiency
-Sales maximisation
What is a sole trader?
A business that has a single owner
What are the advantages of being a sole trader?
-Owner has complete control
-All profits belong to the owner
-Easy and inexpensive to set up
What are the disadvantages to being a sole trader?
-Unlimited liability
-Limited access to funds and capital
-Limited skill sets as it is only you
What is a partnership?
Two or more people join together to form a business
What are the advantages of a partnership?
-easy and inexpensive to set up
-shared responsibilities
-More skills and knowledge available
What are the disadvantages of a partnership?
-Unlimited liability
-Potential for dispute against partners
-Profits are shared
What is a Private limited company (LTD)?
The ownership of the business is broken down into a specified number of shares sold by the owner usually to friends and family
What are the advantages of LTDs?
-Limited liability
-Access to greater finance and capital due to shares being sold
-Can have a professional image and reputation
What are the disadvantages of a LTD?
-More expensive and time consuming to set up
-More complex legal requirements and regulations
-Banks may not give access to loans as the business can not pay their debts
What is unlimited liability?
The owner is personally responsible for any debts the business incurs
What is franchising?
Where a franchisee buys the rights to operate a business with a franchisors brand name
What is a social enterprise?
A business that has the primary purpose to create social or environmental impacts where profits are usually invested back into the business
