1.5 Entrepreneurs Flashcards
Definition of Entrepreneur
A person who is willing and able to create a new business idea and take risks to pursue success
3 Things an Entrepreneur does
-They organise resources
-They make business decisions
-They take risks
Definition of Intrapreneurship
The practise of promoting entrepreneurial thinking and behaviour in a business
How does Intrapreneurship help a business
-Encourages risk taking and innovation
-Help gain a competitive advantage
-Aid growth
-Increase motivation
4 Barriers to Entrepreneurship
-Access to finance
-Lack of training or know-how
-Entrepreneurial capacity
-Fear of failure or lack of confidence
How does Risk affect Entrepreneurs
-Entrepreneurs need to manage risk and quickly respond to uncertainty
5 Skills an Entrepreneur needs
-Communication
-Problem solving
-Team working
-Organisation
-IT / Numeracy
5 Characteristics an Entrepreneur needs
-Creativity
-Hard working
-Initiative
-Risk Taker
-Self Confidence
What is Profit Maximisation for starting a business
An entrepreneur wants to create a business that generates a substantial revenue and profit
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
What is an Ethical Stance for starting a business
Some entrepreneurs have an ethical stance they want to build a business around
What is a Social Entrepreneurship for starting a business
An aim to address a social or environmental problem
What is Independence for starting a business
Where an entrepreneur wants to have control over their work
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
What is a Common Objective for a Start Up
Survival and generate enough cash flow
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
What is Market Share as an objective
-Aim to increase market share by producing and selling better quality products than competitors
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
