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business > 1.5 entrepreneurs and leaders > Flashcards

1.5 entrepreneurs and leaders Flashcards

1
Q

what is an entrepreneur

A

a person who starts a business and takes risks in hope of profit or reward

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2
Q

what components are involved in running a business

A

completing finances
buying stock
listing stock for sale
contacting customers
chasing payments

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3
Q

how can an entrepreneur expand a business

A

open more locations
franchise the business
diversify/ enter new markets
buy another business

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4
Q

what is intrapreneurship

A

when an employee within a business thinks like an entrepreneur

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5
Q

what are some factors of intrapreneurship

A

risk taking
innovating
understanding trends
problem solving

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6
Q

what barriers to entrepreneurship are there (5)

A

entrepreneurial capacity
access to finance
lack of training
fear of failure
lack of confidence

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7
Q

what is entrepreneurial capacity

A

the skills, knowledge and attitudes that entrepreneurs have that some people may lack

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8
Q

what is access to finance

A

the amount of money an individual can access, does not necessarily have to be theirs - family, loan

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9
Q

what is a lack of training

A

dont know how to start a business, lack knowledge/ education.
similar to capacity

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10
Q

what is a fear of failure

A

when an individual does not want to start a business as they are afraid it will fair and the repercussions it may have

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11
Q

what is lack of confidence

A

people don’t have the confidence to become an entrepreneur - shows they are not one as entrepreneurs take risks
can be overcome in a training course

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12
Q

what are entrepreneurial motives

A

the factor that drives a person to start their own business

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13
Q

characteristics of an entrepreneur (6)

A

hard working
risk taker
resilient
initiative
self confidence
creativity

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14
Q

what are skills of an entrepreneur (6)

A

communication
organising
team working
IT
numeracy
problem solving

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15
Q

what are financial motives for starting a business

A

profit maximisation
profit satisficing

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16
Q

what is profit maximisation

A

when an entrepreneur aims to make as much profit as possible by reducing costs and maximising revenue
retained profit is spent on R&D - needed to maintain high levels of productivity and innovation

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17
Q

what is profit satisficing

A

when an entrepreneur makes just enough money to keep the business alive whilst satisfying another aim at the same time
i.e maximise the wages for employees - donate spare profits to charity

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18
Q

Non-financial motives for setting up business

A

independence
flexibility
ethical reasons
social purpose
personal challenge

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19
Q

what are business objectives

A

a goal or aim that business want to achieve so that everyone knows what way the business is going

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20
Q

SMART

A

specific
measurable
achievable
realistic
time-bound

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21
Q

what is shrinkflation

A

where the manufacturer keeps the price the same and just reduced the size
means they can widen the profit margins

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22
Q

business objectives SCECS M

A

sales maximisation
cost efficiency
employee welfare
customer satisfaction
social objectives
market share

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23
Q

what are the public sector organisations

A

public sector companies
public sector organisations

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24
Q

Public Sector Companies

A

A relatively small number of companies are owned or controlled by the Government
Network Rail

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25
Public Sector Organisations
organisations that provide goods and services which are owned and operated by public bodies These are funded by central & local government, but may still levy charges NHS
26
Public Sector
owned by state provide services to meet public needs Prices are often nil or low at point of use – set by the government
27
Private Sector
owned by individuals meet consumers needs and wants prices determined by market profit kept by owners/shareholders
28
Unincorporated businesses
The owner is the business Owner has unlimited liability most are sole traders
29
Incorporated businesses
Legal difference between the business (company) and the owners limited liability for owners most are ltds
30
what is unlimited liability
when business owners are responsible for all debts and troubles if a unincorporated business goes bankrupt, the owner has to pay all debts
31
SOLE TRADER
an individual owning the business on their own they can employ people but they will not have ownership
32
benefits and negatives of sole traders
easy to set up easy to run minimal paperwork easy to close down unlimited liability hard to raise finance increased tax rates if owner suffers, business suffers (illness)
33
what are partnerships
2-20 people share the risks, costs and responsibilities of owning a business profit is shared between partners but they have to pay individual tax on them
34
advantages and disadvantages of partnerships
easier to raise capital (2-20) profits go to partners increasing motivation small business = good relations info can stay private skills shared unlimited liability may be disagreements - control, profits, new members, withdrawal
35
Social enterprise
A social enterprise is a business that trades and ploughs back profits back into social and/or environmental purposes
36
limited liability
protection for shareholders can only lose the value of their investment
37
what does limited liability not protect against
wrongful/fraudulent trading when personal guarantees have been given the directors
38
role of shareholders in a ltd
most likely the same people responsible for the day to day running of the business
39
why do shareholders invest
to earn returns - through dividends or increase in share price
40
how are dividends calculated
decided by the business but high rates may attract more shareholders
41
changes in share price
if demand > supply for a share price increases if supply > demand share price decreases
42
companies influence of share price
financial performance dividend policy relationships with investors management reputation
43
external influence on the share price
state of the economy competitions performance whether the company is a takeover target
44
what is a ltd
private limited company LTDs can expand and grow by selling more shares Shares cannot be bought by the public have full control of who buys the shares LTDs have the benefit of limited liability. their private assets remain safe
45
advantages and disadvantages of ltd
limited liability can raise capital by selling shares to friends can employ people accounts have to be public complex set up - admin cannot sell shares on stock market - limits capital that can be raised
46
how does a ltd become a plc
when a ltd cannot get any more capital from owners, it issues a prospectus, where potential investors are invited to purchase shares before flotation
47
drawbacks of moving from a ltd to plc
expensive -need lawyers for legal paperwork -publications - advertising -company must have 50k in share capital
48
share capital
money raised by selling shares to new and potential shareholders
49
dividends
payments to the shareholders from the profits a firm has made - part of return of investment
50
What is a franchise
When a business gives another person the right to trade under their name MCDonalds
51
what is a franchisee
the business owner who is buying the rights to trade under another name
52
what is a franchisor
this is the business that is selling the rights
53
pros of franchising
franchisees are picked carefully, meaning there will most likely be profits made franchisor decides how much money is invested franchisor provides support, management and training
54
cons of franchising
franchisees do not have freedom to run their own business - cant be entrepreneurial bound by rules - cannot set the price franchisee pays royalties to franchisor franchisee will not ever have full ownership
55
what is a lifestyle business
A business that provides good quality of life for owner - not necessarily profits focused.
56
online business
a business that is online and may not necessarily have any capital
57
pros and cons of business
lower running costs wider audience to attract flexibility High competition lack of trust technical differences
58
opportunity cost
the cost of forgoing the next best option - the cost of not choosing an alterative option
59
what factors does opportunity cost include
4 factors of production (LLCE) trade offs for investing into one more than the others
60
trade off definition
when less of one item is exchanged for more of another one also called a compromise doing less of one thing to increase production of another
61
difference between an entrepreneur and a leader
entrepreneur sets up and creates their own business + takes risks in hope of reward leaders take charge and lead people in an organisation, or having the ABILITY to do it
62
what is learning to delegate (entrepreneur to leader)
delegation is giving authority to others to carry out other tasks an entrepreneur will need to delegate tasks so they can focus on mote strategic areas of the business
63
trusting others (entrepreneur to leader)
entrepreneurs will have to trust others, allowing them to delegate tasks to new employees and form trust with new customers
64
listening to others (entrepreneur to leader)
entrepreneurs will have to listen to majority shareholders to make the the best decisions for the business allows them to take on ideas from others and expand business
65
be less reactive (entrepreneur to leader)
shoud be less reactive and more proactive in an active market means setting trends and seeing gaps in the market - not reacting to trends finding gaps means a usp - allowing for more profit
66
Emotional intelligence (entrepreneur to leader)
ability to manage emotions in order to benefit the business the most - reduce stress and conflict

business (7 decks)

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