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Business > 1.5 Entrepreneurs And Leaders > Flashcards

1.5 Entrepreneurs And Leaders Flashcards

1
Q

What are the 3 stages that entrepreneurs go through when starting a business??

A
  • Creating & setting up a business
  • Running and developing a business
  • Bringing innovation
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2
Q

What are the 3 sources of business ideas??

A
  • Business experience
  • Personal experience
  • Observations
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3
Q

What are 3 barriers to entrepreneurship??

A
  • Support and finance
  • Lack of confidence
  • Lack of knowledge
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4
Q

What are 3 ways of overcoming risk??

A
  • Take calculated risks
  • Keep generating new ideas
  • Spread risk by diversifying
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5
Q

What are 3 uncertainties of owning a business??

A
  • Health scares
  • Political factors
  • Changes in legislation
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6
Q

What are 4 entrepreneurial characteristics??

A
  • Initiative
  • Hard-working
  • Risk-taker
  • Creative
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7
Q

What are 3 entrepreneurial skills??

A
  • Communication
  • Numeracy
  • Organisation
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8
Q

What are the 2 financial motives of owning a business??

A
  • Profit maximisation
  • Profit satisficing
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9
Q

What’s profit satisficing??

A

Making enough profit but not pushing to maximise it
Have enough to have an enjoyable lifestyle (called lifestyle business)

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10
Q

What are 4 non-financial motives??

A
  • Independence (freedom to pursue own ideas and not have a boss)
  • Flexibility
  • Challenge
  • Ethics (setting up a business to tackle ethical issues)
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11
Q

What’s a social enterprise??

A

Trade in goods or services for a social purpose

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12
Q

What’s the triple bottom line??

A
  • Profit
  • People
  • Planet
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13
Q

What is a business aim??

A

Broad target or goal for the long-term

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14
Q

What is a business objective??

A

Target or goal set for the short to medium-term to help achieve aim

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15
Q

What are the 8 business objectives??

A
  • Survival
  • Profit maximisation
  • Sales maximisation
  • Market share
  • Cost efficiency
  • Employee welfare
  • Customer satisfaction
  • Social objectives
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16
Q

What does SMART stand for?? (in relevance to what business objectives should be)

A

Specific
Measurable
Achievable
Relevant
Time bound

17
Q

What is the hierarchy of business objectives??

A

Mission (most detailed)
Corporate
Functional
Team
Individual (most strategic)

18
Q

What are the 4 forms of business??

A
  • Sole trader
  • Partnership
  • Ltd
  • PLC
19
Q

What are 3 advantages of Sole Traders??

A

+ Freedom
+ Get all profit
+ Less paperwork
+ No legal costs for ownership

20
Q

What are 3 disadvantages of Sole Traders??

A
  • Long hours
  • Limited skills
  • No cover for sick/holiday days
  • Unlimited liability
21
Q

What are 3 advantages of Partnerships??

A

+ Minimal paperwork
+ Mixed skills & knowledge
+ Specialist skills
+ More potential for capital

22
Q

What are 3 disadvantages of Partnerships??

A
  • Unlimited liability
  • Conflict
  • Splitting profits
23
Q

What’s a Private Limited Company??

A

The owners have to agree before anyone buys or sells shares

24
Q

What’s a Public Limited Company??

A

Anyone can buy shares which are sold publicly on the stock market

25
Q

What are 3 advantages of Limited Companies??

A

+ Limited liability
+ Easier to raise finance
+ Stable form of structure (if a shareholder or owner leaves, business doesn’t have to close)

26
Q

What are 3 disadvantages of Limited Companies??

A
  • Larger admin costs
  • Public disclosure of company information
  • Potential loss of control
27
Q

What are 2 reasons a business would decide to become a Private Limited Company?? (and 2 reasons why not)

A

Pros:
- More stability
- Business looks more professional as an ‘ltd’

Cons:
- Loans are less likely (owner’s personal assets aren’t at risk so bank may not trust it’ll be repayed)
- Less profit for each owner

28
Q

What are 2 reasons an Ltd would decide to become a PLC?? (and 2 reasons why not)

A

Pros:
- More capital
- Higher prestige

Cons:
- Low control over share price (controlled by economy)
- Less profit for each owner
- Potential loss of control

29
Q

What is the private sector??

A

Operated by private individuals and usually for profit

30
Q

What are Public sector companies/businesses??

A

Small number of companies owned or controlled by government

31
Q

What are Public sector organisations??

A

Organisations owned and operated by public bodies but funded by government

32
Q

What are 4 different types of business??

A
  • Franchising
  • Online businesses
  • Lifestyle businesses
  • Social enterprises
33
Q

What are 3 advantages of franchising??

A

+ Tested & developed
+ Lower risk
+ Easier to raise finance

34
Q

What are 3 disadvantages of franchising??

A
  • Royalties & commission
  • Restrictions on actions
  • Less responsibility
  • Franchisor fails = franchise fails
35
Q

What are 2 pros and 2 cons of online businesses??

A

+ Cheap and easy to set up
+ Can be run from anywhere
- Owner may not have necessary IT skills
- Technical issues could occur

36
Q

What are 2 pros an 1 con of lifestyle businesses??

A

+ Flexibility
+ Low start-up costs
- Limited growth

37
Q

What’s a trade-off??

A

Having more of one thing potentially results in having less of another

38
Q

What’s an opportunity cost??

A

The benefit that’s given up in order to do something else

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