1.5 Entrepreneurs Flashcards
Entrepreneur
Person who sets up a business and takes risks in the hope of profit or reward
intrapreneurship
An employee within a larger business who thinks like an entrepreneur
Barriers to entrepreneurship
-no access to finance
-lack of training
-fear of failure
-lack of confidence
risk
Possibility that the business will have a lower than expected profit or even a loss
Uncertainty
When business is unable to predict external shocks or future events e.g pandemic
Entrepreneur characteristics
-creativity
-hard work
-resilience
-initiative
-self confidence
-risk taking
Financial motives for starting business
-Profit maximisation
-Profit satisficing
Non financial motives for starting business
-Independence
-Flexibility
-Ethical reasons
-Social purpose
-Personal challenge
Business objectives
Survival- short term objective for start of business where it hopes to get a customer base
Profit maximisation- making most profit possible from a given amount of resources
Sales maximisation- focusing on increasing sales.
Increase market share
Increasing customer satisfaction
Sole trader
Run by an individual
Can employ staff
Have full responsibility
Partnership
Usually 2-20 people
unlimited liability
shared responsibility
private limited companies (ltd)
owned by shareholders. shareholders are only family/friends
shareholders are paid a dividend
limited liability
public limited companies (plc)
owned by shareholders.
shares are available to public
can raise a lot of capital
demand can affect share value
Franchising
allows new businesses to be set up quickly.
An agreement which allows entrepreneurs to use the name of an established business. In return you would have to give a percentage of profits.
This is cheaper and easier than starting a new business.
Online business
Businesses that trade through the internet.
Relatively cheap and easy to set up.
