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Business > 1.5 - entrepreneurs and leaders > Flashcards

1.5 - entrepreneurs and leaders Flashcards

1
Q

what is an entrepreneur and what are some of the characteristics that they obtain

A

= someone who makes a business idea happen, either through their own effort or by organising others to do so, as well as taking risks in order to satisfy customer wants and needs

  • understand the market
  • determination
  • passion
  • resilience
  • ability to cope and calculate risk
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2
Q

define risk and how it would relate to entrepreneurs

A

= the possibility of financial loss or failure

- entrepreneur looks at the risk, compares them with the possible reward, and then makes a calculated decision

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3
Q

what are some skills required of a successful entrepreneur

A
  • ability to read and understand key financial documents such as cash flow forecasts
  • persuasive abilities
  • problem solving skills
  • networking skills(crowdfunding or social media endorsements)
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4
Q

what are some reasons for starting your own business

A

fill a gap in the market, deliver a service, monetary return - profit orientated = financial

provide product to benefit others, wants to be their own boss, ethical stance, work from home, more flexible hours = non - financial

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5
Q

what is profit maximisation

A

entrepreneurs aim to make the highest amount of profit possible, seeking to minimise costs and maximise revenue

SOLE TRADER +larger wages can be drawn from the profit
LTD / PLC = dividends will be larger on shares
= share price increases = attracts investors

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6
Q

what is profit satisficing

A

trying to find the most “ideal” profit, not just the biggest,
think about its long term future
new small businesses, if they want a successful long term business, profit satisficing is better than short term maximisation

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7
Q

what are some advantages of being your own boss - non finanical motive

A
  • can work by themself - doesn’t need to answer to anyone
  • independence within your own ideas - no creative blocks or restrictions
  • Autonomy
  • sense of achievement
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8
Q

explain the ethical stance as a non financial motive for becoming an entrepreneur

A
  • stronger ethical convictions decide to start up their own business instead of relying on larger corporations who aren’t ethical in their actions
  • gives the owner a large amount of control as long as they trade from an ethical stance

e.g. fairtrade, animal rights/testing , organic produce

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9
Q

why might working from home be seen as a non financial motivator for an entrepreneur

A
  • convenient
  • work life balance
  • cheaper due to lessened commute
  • control of when you work

however, most homeworkers have to accept the piece rate terms that give no secutiry of income and can end up working at a ver low hourly rate

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10
Q

why might engaging in a social enterprise be a non financial motivator for an entrepreneur

A

social enterprises are businesses trading for social and environmental purposes
- health benefits
- ethical
= central to what they do
= profits are reinvested to sustain and further develop their mission for change

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11
Q

what is a business objective

A

the goals set for the business as a whole - they dervice from the mission and aims set by the director

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12
Q

what are the business functions

A

marketing - advises business on trends and tastes, purchasing habits, how to advertise and promote
HR - recruitment, training, financial incentives, redundancy, dismissals
Finance - budgets, monitor spending levels to make sure costs are kept under control
Operations - manages supply chain, the flow of work, buying materials and components

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13
Q

explain SURVIVAL as an objective

A
  • may avoid actions that look highly profitable yet have a high risk
  • any sudden changes in the economy such as a recession may cause unexpected losses
  • reach a sustainable level of sales so that a business reaches their break-even point
  • able to raise prices of products in the future
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14
Q

explain PROFIT MAXIMISATION as an objective

A
  • attempt to make as much profit as possible likely as fast as possible
  • may follow this approach if a rival is attempting to buy them out
  • companies may also “float” their shares onto the stock market
  • provides a reward for stakeholders
  • provides a measure of efficiency
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15
Q

explain SALES MAXIMISATION as an objective

A
  • decisions are made that focus on rising profits
  • salaries are often linked to sales levels
  • sales data would be an indicator for performance
  • sales-driven environment such as car dealerships
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16
Q

explain MARKET SHARE as an objective

A

% of a market that a business owns

  • very competitive market where consumers may switch suppliers frequently
  • investors judge based on increase/decrease - can be an indicator of financial problems
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17
Q

explain COST EFFICIENCY as an objective

A

can be achieved by:

  • paying minimum wage to unskilled workers
  • subcontracting where economically viable
  • increase the perceived value of a product through strong branding
  • lower average costs = economies of scale
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18
Q

explain EMPLOYEE WELFARE as an objective

A
  • seel harmonious relations within their workforce
    external = medical insurance, housing, education for family
    internal = canteen/cafe, creche, uniforms

employees are therefore more motivated and determined to work harder, as their morale has increased.
enhanced public image and increased staff retention

19
Q

explain CUSTOMER SATISFACTION as an objective

A
  • common in the service industry
  • monitor customer service levels through
  • rarely a corporate objective
  • generates customer loyalty
20
Q

explain SOCIAL OBJECTIVES as an objective

A
  • only mean something if business is willing to sacrifice some profit or market share
  • can just be image related
  • finanical objectives are usually a large priority
21
Q

what is unlimited liability

adv/dis

A

= owners are liable for any debts incurred by the business - sell their own assets such as car, house, personal possessions
+ some tax advantages - dependent on profit
+ less rules to comply with
- more risky
- personal assets at risk
- harder to secure loans/capital

22
Q

what is a sole trader

adv/disadv

A 
=business owned by one person,, can employ people but they will not be involved in control of business
= unlimited liability
ADV
\+easy to set up
\+make decisions quickly
\+less capital needed
\+ doesn't have to make info public
DIS
- unlimited liability
- difficult to raise money
- no economies of scale
23
Q

what is a partnership

adv/disadv

A 
= between 2 and 20 partners who joint own the business,, may do decision making together
ADV
- shared knowledge and expertise
- small amounts of capital needed
- information not made public
DIS
- unlimited liability
- partners may have disagreeements 
- shared profits
24
Q

what is limited liability

adv/disadv

A

owners are not liable for the debts of the business - can only lose as much as the sum that they invested
- has to go through the process of incorporation to become a separate legal identity
+ less paperwork
+ not personally liable
+ more flexibility
- ownership harder to transfer
- more expensive

25
Q

adv/disadv of forming a limited company

A

adv
- limited liability
- gain access to a wider range of opportunities
dis
- finanical information available to public
- more expensive

26
Q

what is a private limited company = LTD

A
  • made up of people who know each other
  • friends/family can buy shares
  • not bought by public
  • owners control who buys shares
  • expand by selling more shares = more capital
  • limited liability
    ADV
  • continue trading if shareholder dies
  • own legal status
    DIS
  • accounts made public
  • more administration
  • not sold on stock exchange
27
Q

what is the difference between a public and private limited company

A
  • public company can raise capital from the general public
  • no minimum capital requirement for a private company
  • public companies have to publish more detailed account information
28
Q

what is a franchise

A

= where a small business owner buys the rights to sell the goods and services of a large established company

29
Q

what is a franchisee

A

an independent business that has bought the rights to use a firms logo and trading practices within an area

30
Q

adv/disadv of running a franchise

A

disadv

  • not their own boss
  • could supply little support and training
  • take a percentage of your profit = ROYALTY

adv
+ training usually provided free of charge
+ less risk of failure as already established
+ interest rate lower for loans

31
Q

what is a social enterprise

A

business that trades for social or environmental purposes - monetary reward is not their motivator
may be for brand image
- “cooperatives” = can be worker owned, potential to offer a more united cause for the workforce than the profit of shareholders

32
Q

explain online businesses

A
  • easy to set up
  • available 24/7 - no closing times
  • can be managed from anywhere
32
Q

explain online businesses

A
  • easy to set up
  • available 24/7 - no closing times
  • can be managed from anywhere
33
Q

what is a public limited company

adv/disadv

A

= only 2 people needed to set up, people can buy shares on stock market, can expand by selling more shares, limited liability, own legal status
ADV
- limited liability
- easy to raise capital by selling shares
- easier to grow and expand
DISADV
- expensive
- have to prepare annual accounts and make finances public

34
Q

what is an opportunity cost

A

the cost of the loss of an item not chosen or the profit from the goods not produced

35
Q

what are some opportunity costs when starting a new business

A
  • do not tie up too much capital in stock - could use cash to invest elsewhere
  • take calculated risks but ensure survival
36
Q

what is a trade off

A

a compromise

= accepting less of one thing to achieve more of another

37
Q

define an entrepreneur

A

a person who sets up a business taking financial risks in hope to make a profit

38
Q

explain the concept of LEARNING TO DELEGATE

A

= passing authority down the hierarchy to allow more employees to have some decision making power
= develop their social interactions and dealing with management and controlling business

39
Q

explain the concept of TRUSTING OTHERS

A

sometimes means letting go of an idea you feel passionate about in order to build on your relationship with an employee
= high level of emotional intelligence needed

40
Q

explain the concept of LISTENING TO OTHERS

A

= having open discussions about problems that they may want to discuss - having empathy and compassion, as well as being fair and following rules and legislation

41
Q

explain the concept of BEING LESS REACTIVE

A

be more proactive - emphasises strategic planning and risk management

  • being able to spot gaps in the market
  • competitive advantage for being the first one to infiltrate the market
42
Q

explain the concept of developing your emotional intelligence

A
  • self awareness
  • self management
  • social awareness
  • relationship management
    = ability to manage your emotional intelligence can have an impact on your performance, productivity and efficiency in the workplace.

Business (11 decks)

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