1.5 Entrepreneurs And Leaders

Question 1

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

Answer 1

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

Question 2

What are the 3 sources of business ideas??

Answer 2

• Business experience
• Personal experience
• Observations

Question 3

What are 3 barriers to entrepreneurship??

Answer 3

• Support and finance
• Lack of confidence
• Lack of knowledge

Question 4

What are 3 ways of overcoming risk??

Answer 4

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

Question 5

What are 3 uncertainties of owning a business??

Answer 5

• Health scares
• Political factors
• Changes in legislation

Question 6

What are 4 entrepreneurial characteristics??

Answer 6

• Initiative
• Hard-working
• Risk-taker
• Creative

Question 7

What are 3 entrepreneurial skills??

Answer 7

• Communication
• Numeracy
• Organisation

Question 8

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

Answer 8

• Profit maximisation
• Profit satisficing

Question 9

What’s profit satisficing??

Answer 9

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

Question 10

What are 4 non-financial motives??

Answer 10

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

Question 11

What’s a social enterprise??

Answer 11

Trade in goods or services for a social purpose

Question 12

What’s the triple bottom line??

Answer 12

• Profit
• People
• Planet

Question 13

What is a business aim??

Answer 13

Broad target or goal for the long-term

Question 14

What is a business objective??

Answer 14

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

Question 15

What are the 8 business objectives??

Answer 15

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

Question 16

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

Answer 16

Specific
Measurable
Achievable
Relevant
Time bound

Question 17

What is the hierarchy of business objectives??

Answer 17

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

Question 18

What are the 4 forms of business??

Answer 18

• Sole trader
• Partnership
• Ltd
• PLC

Question 19

What are 3 advantages of Sole Traders??

Answer 19

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

Question 20

What are 3 disadvantages of Sole Traders??

Answer 20

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

Question 21

What are 3 advantages of Partnerships??

Answer 21

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

Question 22

What are 3 disadvantages of Partnerships??

Answer 22

• Unlimited liability
• Conflict
• Splitting profits

Question 23

What’s a Private Limited Company??

Answer 23

The owners have to agree before anyone buys or sells shares

Question 24

What’s a Public Limited Company??

Answer 24

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

Question 25

What are 3 advantages of Limited Companies??

Answer 25

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

Question 26

What are 3 disadvantages of Limited Companies??

Answer 26

- Larger admin costs - Public disclosure of company information - Potential loss of control

Question 27

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

Answer 27

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

Question 28

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

Answer 28

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

Question 29

What is the private sector??

Answer 29

Operated by private individuals and usually for profit

Question 30

What are Public sector companies/businesses??

Answer 30

Small number of companies owned or controlled by government

Question 31

What are Public sector organisations??

Answer 31

Organisations owned and operated by public bodies but funded by government

Question 32

What are 4 different types of business??

Answer 32

- Franchising - Online businesses - Lifestyle businesses - Social enterprises

Question 33

What are 3 advantages of franchising??

Answer 33

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

Question 34

What are 3 disadvantages of franchising??

Answer 34

- Royalties & commission - Restrictions on actions - Less responsibility - Franchisor fails = franchise fails

Question 35

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

Answer 35

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

Question 36

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

Answer 36

+ Flexibility + Low start-up costs - Limited growth

Question 37

What's a trade-off??

Answer 37

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

Question 38

What's an opportunity cost??

Answer 38

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