1.5 Entrepreneurs and Leaders Flashcards
What does entrepreneurship involve?
Creating and setting up a business
Running and setting up a business
Innovation within a business (intrapreneurship)
Anticipating risk and uncertainty in business environment
Issues for setting up a business
Having the initiative to exploit a business opportunity
Calculate risks involved in the business
Raising the finance to investment in the set up the business
Raising the finance to investment in the set up the business
Issues when expanding the business
Carry out marketing research to see if there is demand to justify expansion
Raise necessary finance
Introduce new products and services
Invest in new technology, better equipment to improve service
Take on more skilled staff
Changing the organisation of the business
Why would businesses encourage intrapreneurship?
Helps the business grow and develop, important in more dynamic markets
Uncertainty
Situation in which there is a degree of risk and the consequences are not known
3 reasons why businesses face uncertainty
Economic reasons
Competitor actions
Changes in society
Motives for starting a business
Be their own boss
Earn their own money
More flexibility
Ethical reasons for starting a business
Make a difference, eco-friendly
Give back to society
Personal barriers to entrepreneurship
Lack of self esteem
Risk averse
Fear of failure
Lack of tech skills
Economic barriers to entrepreneurship
Taxation
Recession
Unemployment
Financial barriers to entrepreneurship
Lack of start up capital
Lack of cheap labour
Lack of investment
Political barriers to entrepreneurship
Regulations
Unstable political landscape
Lack of govt support
Business objectives
Set for a business in the short or medium term
Survival as an objective
Initial objective may be to survive
The objective is to reach the BE point
A recession may mean that businesses shift focus to survive
Profit maximisation as an objective
Key focus as they’re needed to reinvest into the business to allow it to grow
To do this, owner must manage costs and boost productivity. Also ensure sales and profit margins are high.
Businesses will compare profits to previous years and competitors.
Sales maximisation as an objective
Sales figures can be examined on a daily, weekly or monthly basis.
Managers set targets for sales figures and offer bonuses to staff for achieving.
Often found in environments like: estate agents or car dealerships.
Market share as an objective
May be done in a very competitive market
To gain, firms will try to provide better value or higher quality than competitors.
Cost efficiency
Achieved by:
Paying minimum wage to unskilled workers
Subcontracting where economically viable
Lean production or construction where material, time and process waste is eliminated to save costs
Lowering the average costs through economies of scale.