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BM Business theme 1 > 1.5 Entrepreneurs and leaders > Flashcards

1.5 Entrepreneurs and leaders Flashcards

1
Q

What is an entrepreneur?

A

A person who is willing and able to create a new business idea or invention and takes risks in pursuing success.

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2
Q

What are the key activities of entrepreneurs?

A
  • Organise resources
  • Make business decisions
  • Take risks
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3
Q

What does it mean to organise resources in entrepreneurship?

A

Gathering and coordinating the necessary resources to start and operate a business.

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4
Q

Provide an example of organising resources.

A

When Michael Dell started his computer company from his garage, he organised space, computers, software tools, and employees.

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5
Q

What is the importance of decision-making for entrepreneurs?

A

Decisions determine the success or failure of the business.

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6
Q

Fill in the blank: Entrepreneurship involves taking _______.

A

[risks]

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7
Q

Give an example of risk-taking in entrepreneurship.

A

Investing life savings into a new venture or quitting a secure job to start a business.

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8
Q

What is intrapreneurship?

A

The practice of promoting entrepreneurial thinking and behaviour within an existing business.

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9
Q

How does intrapreneurship benefit a business?

A

It allows businesses to tap into the creative potential of employees and generate new products, services, or processes.

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10
Q

What is the ‘20% time’ policy at Google?

A

A policy that allows employees to spend 20% of their work time on personal projects.

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11
Q

What was developed under Google’s ‘20% time’ policy?

A

Gmail, a free email service.

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12
Q

What barriers can prevent individuals from starting a successful business?

A
  • Lack of entrepreneurial capacity
  • Lack of access to finance
  • Lack of training/know-how
  • Fear of failure/lack of confidence
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13
Q

Define entrepreneurial capacity.

A

An individual’s ability to think creatively, take risks, and identify and seize business opportunities.

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14
Q

True or False: Uncertainty is caused by factors within the entrepreneur’s control.

A

False

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15
Q

What is the difference between risk and uncertainty?

A

Risk is something an entrepreneur can plan for, while uncertainty is caused by factors outside of their control.

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16
Q

What are 5 skills required by entrepreneurs

A

Communication

Teamwork

problem solving

organisation

Numeracy

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17
Q

What are characteristics required by an entrepreneur

A

Creativity

Hard working

Resilience

Initiative

Self confidence

Risk taker

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18
Q

What are the two common financial reasons people set up a business

A

Profit maximisation

Profit satisfaction

19
Q

Why do people set up businesses for profit maximisation

A

People want to generate substantial revenue and profit

20
Q

Why do people set up businesses for profit satisfaction

A

Is not solely focused on maximising profits but rather a satisfactory level

21
Q

What are non financial reasons for someone to start a business

A

Ethical stance

social entrepreneurship - seek to address a social or environmental problem

Independence- be their own boss and have control over their work

Home working

22
Q

What is the aim of most start up businesses

A

Survive the initial entry into the market

23
Q

What are likely business objectives

A

Profit maximisation

sales maximisation

market share

cost efficiency

employee welfare

customer satisfaction

social objectives

24
Q

What is a sole trader

A

A firm that has a single owner who makes all the decisions and gets to keep all of the profits.

owner is legally responsible for all debts of the business

25
Q

What is meant by limited liability

A

A legal structure in which the assets of the owners are considered to be separate to those of the business

26
Q

What are the advantages of sole traders

A

Easy and inexpensive to set up

Owner has complete control

All profits belong to the owner

simple tax

27
Q

What are the disadvantages of a sole trader

A

Responsible for any debts the business incurs

limited access to finance

Limited skill set of the single business owner

28
Q

What is a partnership

A

Two or more people join together to form a business

29
Q

What are the advantages of a partnership

A

Easy and inexpensive to set up

shared responsibility and decision making

more skills and knowledge available

increased access to finance and capital

30
Q

Disadvantages of a partnership?

A

Partners have unlimited liability

potential disputes between partners

profits are often shared equally no matter the contribution

difficult to transfer ownership

31
Q

What is meant by unlimited liability

A

The business owner or owners are personally responsible for all of the debts of the business, no matter the value

32
Q

What is a Private limited company

A

Ownership is broken down into a specified number of shares

Decision making often rests with the person appointed CEO

(LTD)

33
Q

What are advantages of a private limited company

A

Limited liability (owners are not personally responsible for the company’s debt)

Access to greater finance and capital

Easier to transfer ownership

professional image and rep

34
Q

What are the disadvantages of a private limited company

A

More expensive and time consuming to set up

More complex legal requirements and regulations

annual financial reporting and auditing is required

Shareholders have little control over the company. Founder usually imposes their agenda

35
Q

What is a franchise

A

An individual buys the rights to operate a business model and branding of a larger company in exchange for large fees

e.g. mcdonalds

36
Q

What is a social enterprise

A

A business with the primary purpose to create social or environmental impact

37
Q

What is a public limited company

A

a company that is able to offer its shares to the public. Operate on the stock exchange

38
Q

What are the advantages to becoming a PLC

A

Significant amounts of capital can be raised

Risk is shared among a larger group of shareholders

Increased liquidity, easier to buy and sell shares

Greater public profile due to operating on the stock exchange

Limited liability

39
Q

Disadvantages of beinig a PLC

A

Expensive to set up

more complex accounting and reporting requirements

greater risk of hostile takeover

shareholders expect a dividend

Shareholders may clash

40
Q

What is an opportunity cost?

A

The loss of the next best alternative when making a decision

41
Q

What is a trade off

A

When two things cannot be fully achieved

42
Q

Can every entrepreneur be a successful CEO?

A

Usually not, the skills required for a CEO are different to those required for an entrepreneur

43
Q

What are difficulties entrepreneurs face when transitioning to becoming a CEO of a growing business

A

They need to learn how to delegate tasks and responsibilities, use to doing it all themselves

Being able to trust your team

Learning to listen and having an open mind to new ideas

Being less reactive and more strategic

BM Business theme 1 (5 decks)

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