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Business Theme 1 > 1.5 Entrepreneurs and leaders > Flashcards

1.5 Entrepreneurs and leaders Flashcards

1
Q

How may a business generate a business idea?

A

Observation

Brain storming

Thinking ahead

Personal/ Business experience

Innovations

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2
Q

How may a business spot an opportunity:

A

Changes in technology

Changes in society

Changes in the economy

Changes in the housing market

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3
Q

How do successful entrepreneurs run their business?

A

Measure performance in an unbiased way

Eye for detail

Have the ability to step back from day-to-day issues

Love what they are doing

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4
Q

What are the problems with business expansion?

A

Over-estimating demand

Failing to raise sufficient finance

Not recruiting enough or the right people

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5
Q

What is intrapreneurship?

A

The name given to the encouragement of the entrepreneurial behaviour within larger businesses

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6
Q

What are the barriers to entrepreneurship?

A

Funding

Gender bias

Lack of public sector support

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7
Q

What are the characteristics/skills required to become a successful entrepreneur?

A

Understanding the market

Determination

Passion

Resilience

Ability to cope with risk

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8
Q

Why do people set up businesses?

A

Profit maximising

Profit satisficing

Independence

Home working

Ethical stance

Social entrepreneurship

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9
Q

What is profit maximising?

A

To continually seek to get the most profit from every business transaction

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10
Q

What is profit satisficing?

A

Blending a desire for profit with other factors e.g building a good reputation

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11
Q

What is an objective?

A

A specific target set by the business

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12
Q

What is a strategy?

A

The plan devised by the business to achieve it’s objectives

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13
Q

What are SMART objectives?

A

Specific

Measurable

Achievable

Realistic

Time-bound

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14
Q

What are common business objectives?

A

Survival

Profit maximisation

Sales maximisation

Market share

Cost efficiency

Employee welfare

Customer satisfaction

Social objectives

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15
Q

What is a sole trader?

A

A person who starts/runs a business without turning it into a company.

Owner is personally liable for any debts meaning if the business goes bust the owner has to use personal assets to pay off debts (unlimited liability)

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16
Q

Advantages of a sole trader:

A

Owner has full control over decisions

Owner keeps all profits made

Minimal paperwork needed to start up

17
Q

Disadvantages of a sole trader:

A

Owner has unlimited liability for debts

Hard to raise finance

18
Q

What is a partnership?

A

2-20 owners of the business

Unlimited liability

19
Q

Advantages of a partnership:

A

More owners can allow more finance to be raised

Partners may bring varied skills and experienced

Shared burden of responsibility among partners

20
Q

Disadvantages of a partnership:

A

Partners have unlimited liability

Potential for disagreement among partners

21
Q

What is a private limited company?

A

Made up of people who know each other

No minimum share capital

22
Q

Advantages of a private limited company?

A

Limited liability

Can raise extra capital by selling shares

Can continue trading if shareholder dies

23
Q

Disadvantages of private limited company:

A

Accounts of the company can’t be kept private

More difficult/expensive to set up

Can’t sell shares on stock exchange

24
Q

What’s a public limited company?

A

The only type of business that can sell shares via the stock market to the general public

25
Q

Advantages of a public limited company:

A

Limited liability

Easy to raise capital by issuing more shares

Banks are more willing to lend

Easier to grow/expand

Shareholders will appoint specialists to manage/run the company for them

26
Q

Disadvantages of a public limited company:

A

Expensive

Has to prepare annual accounts which the public/other shareholders can see

27
Q

What is a franchise?

A

A licence to use another business’ name and business model in return for a payment

28
Q

What is a franchisee?

A

An entrepreneur or company that buys a licence to use another business’ name and business model

29
Q

What is a franchisor?

A

A business that sells the right to use it’s name, logo and business model to other businesses or entrepreneurs

30
Q

Benefits of buying a franchise:

A

Advice/training on all business functions

A guaranteed local monopoly for that brand

Easier access to loans as banks recognise the lower risk involved in starting a franchisee

Franchisor chooses franchisees carefully

31
Q

Drawbacks of buying a franchise:

A

Franchisee may feel frustrated at being unable to make decisions dictated by the franchisor

32
Q

What is a social enterprise?

A

A business that trades for a social and/or environmental purpose

33
Q

What is a lifestyle business?

A

Aim is to provide a great quality of life for the owner

Allows an entrepreneur to live how they want and still run a business

34
Q

What is an online business?

A

A business that is available to customers 24/7 and can be managed from anywhere

Easy to set up

35
Q

What is opportunity cost?

A

The value of the next best option foregone when a business decision is made

36
Q

How can trade offs be successfully managed?

A

Experience

Understanding of consumer tastes

A broad understanding go the business’ current position

An understanding of the external issues influencing the decision

37
Q

What are common business issues when moving from an entrepreneur to a leader?

A

Matching production to demand

Financial problems

Overtrading

Change in structure

38
Q

What are common personal issues when moving from entrepreneur to a leader?

A

Delegating

Maintaining effective communication

Co-ordinating far more people

Keeping an eye on the big issues

Business Theme 1 (5 decks)

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