1.5 Entrepreneurs Flashcards by James Dix

Definition of Entrepreneur

A person who is willing and able to create a new business idea and take risks to pursue success

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3 Things an Entrepreneur does

-They organise resources
-They make business decisions
-They take risks

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Definition of Intrapreneurship

The practise of promoting entrepreneurial thinking and behaviour in a business

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How does Intrapreneurship help a business

-Encourages risk taking and innovation
-Help gain a competitive advantage
-Aid growth
-Increase motivation

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4 Barriers to Entrepreneurship

-Access to finance
-Lack of training or know-how
-Entrepreneurial capacity
-Fear of failure or lack of confidence

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How does Risk affect Entrepreneurs

-Entrepreneurs need to manage risk and quickly respond to uncertainty

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5 Skills an Entrepreneur needs

-Communication
-Problem solving
-Team working
-Organisation
-IT / Numeracy

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5 Characteristics an Entrepreneur needs

-Creativity
-Hard working
-Initiative
-Risk Taker
-Self Confidence

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What is Profit Maximisation for starting a business

An entrepreneur wants to create a business that generates a substantial revenue and profit

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What is Profit Satisficing for starting a business

An entrepreneur wants to generate enough profit for the business to perhaps prioritise a work-life balance

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What is an Ethical Stance for starting a business

Some entrepreneurs have an ethical stance they want to build a business around

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What is a Social Entrepreneurship for starting a business

An aim to address a social or environmental problem

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What is Independence for starting a business

Where an entrepreneur wants to have control over their work

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What is Home Working for starting a business

Where an entrepreneur wants to mange a business from home to offer more flexibility and a better work/life balance

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What is a Common Objective for a Start Up

Survival and generate enough cash flow

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What is Sales Maximisation as an objective

-Focus is on generating the maximum revenue possible
-Business can raise its prices to achieve if inelastic or lower if elastic

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What is Market Share as an objective

-Aim to increase market share by producing and selling better quality products than competitors

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What is Cost Efficiency as an objective

-Focus on ability to produce and sell at the lowest possible cost
-Important for high competitive markets

What is Employee Welfare as an objective

-Commitment to providing a healthy and safe working environment
-Can offer competitive wages, benefits and healthy work life balance

What is Customer Satisfaction as an objective

-An aim to achieve customer satisfaction through high quality products, excellent customer service and attractive pricing

What is a Social Objective

-Commitment to addressing social or environmental issues
-Help to build a positive reputation and operate sustainably

What is a Sole Trader

A business that has a single owner

4 Advantages of a Sole Trader

-Easy to set up
-Complete control
-All profits belong to owner
-Simple tax arrangements

3 Disadvantages of a Sole Trader

-Unlimited Liability
-Limited access to finance
-Limited skill set

What is a Partnership

Two or more people join together to form a business

4 Advantages of a Partnership

-Easy to set up -Shared responsibilities -More skills and knowledge -Increased access to finance

4 Disadvantages of a Partnership

-Unlimited Liability -Potential disputes -Profits shared equally -Difficult to transfer ownership

What is a Private Limited Company LTD

The ownership of a business is broken into shares that can be sold to friends and families

4 Advantages of a LTD

-Limited Liability -Access to greater finance -Easy to transfer ownership -Has a professional image

4 Disadvantages of a LTD

-More expensive, time consuming -Annual finance and auditing required -Shareholders have little control -Complex legal requirements

What is a Public Limited Company PLC

When a business floats stocks onto the market for anyone to buy

4 Advantages of a PLC

-Access to capital -Shared risk -Increased liquidity -Greater public profile

4 Disadvantages of a PLC

-Loss of control -Expectation of dividends -Expensive -Risk of hostile takeover

What is a Franchise

Where an individual (Franchisee) buys rights to operate a business model, branding and support from a larger company (Franchisor) in exchange for initial set up and ongoing fees

What is a Social Enterprise

A business that has a primary purpose to create a social or environmental impact. Profits are reinvested back into business

What is a Lifestyle Business

Typically small, owner-operated businesses that prioritise specific lifestyle over profit and growth

What is an Online Business

A business that sells good over the internet

Definition of Opportunity Cost

The loss of the next best alternative when making a decision

Definition of Trade Off

When two things cannot be fully achieved

How does Delegation affect becoming a leader

There's a need to give up control over some aspects of the business which an entrepreneur might not be used to

How does Trust affect becoming a leader

A balance is needed between trusting the team and verifying their work

How does Listening affect becoming a leader

Entrepreneurs need to listen to others ideas and perspectives

How does Reaction affect becoming a leader

Entrepreneurs need to become more strategic and take a measured approach to decision making

How does Emotional Intelligence affect becoming a leader

Entrepreneurs need to be able to understand and manage their emotions as well as team members