Question 1

What are Opportunity Costs?

Accepted Answer

When choosing between different alternatives, the opportunity cost is the benefit lost from the next best alternative to the one that has been chosen

Question 2

What is the role of the entrepreneur?

Accepted Answer

- Innovation (how do new ideas come out) - Organizers - from production to operations - Make decisions e.g. source of finance, prices ,wages - risk takers

Question 3

How do entrepreneurs find business ideas?

Accepted Answer

- Business experience - Personal experience - Skills - Lifestyle choices

Question 4

What is a Entrepreneurs?

Accepted Answer

individuals who, typically, set up and run a business and take risks associated with this

Question 5

What is an Intrapreneurs?

Accepted Answer

Employees who use entrepreneurial skills , without having to risk their own money, to find and develop initiatives that will have financial benefits for their employer

Question 6

What are the different stages of setting up a business?

Accepted Answer

- Ideas - Research - Planning - Financing - Location - Resources - Launch

Question 7

What needs to be considered when running, developing and expanding a business?

Accepted Answer

Initially, all the entrepreneurs time is production or delivering the service stages in setting up a business, but as the business grows they will focus on other areas: -Financial management --> cash flow, chasing debts -Administration --> pay staff/taxes, chase invoices -Marketing --> methods of advertising, market research, launching new products - Purchasing --> develop relationships with suppliers -Managing people --> recruitment, selection, training motivation -Production --> monitor processes and quality, health and safety As the business grows the entrepreneur will take on the role of leader and hire specialist to deal with the various departments e.g. finance

Question 8

what do Intrapreneurs do?

Accepted Answer

- use entrepreneurial skills to find and develop initiatives that will have financial benefits for their company - they carry no financial risk

Question 9

What are the benefits to having Intrapreneurs employed in product development?

Accepted Answer

- driving innovation can help you get a competitive advantage - helps meet actualization needs - you can win awards, help with PR e.g. Queen Award for Enterprise - Individuals can experiment the cost of failure

Question 10

What are some barriers to Entrepreneurship?

Accepted Answer

- Lack of finance - Lack of entrepreneurial capacity --> the range of skills needed - Becoming an employer --> have to pay them, sick leave, health and safety, NI, training , Maybe unreliable - Legal barriers (red tape) --> complying with legislation relating to employment, the environment, consumers, corporate governance, health and safety, taxation, property rights and competition costs money and diverts an entrepreneurs - Lack of ideas - Fear of failure - Aversion to risk - Corrupt and unsupportive environment

Question 11

What risk would a entrepreneur anticipate to occur?

Accepted Answer

- They have left their secure jobs, - they may have large orders which don't come to anything -->do a credit check on buyers before hand to reduce risks - To reduce risk, rather than doing a big launch, test your product in smaller areas - decision trees is a way of using quantitative technique - Entrepreneurs know with more risks, there is more reward, but also possible loses - Trying to launch a product aboard with different cultures/laws/tastes could lead to a product flop

Question 12

What uncertainty would a entrepreneur perhaps see to occur?

Accepted Answer

- More of a problem for entrepreneurs - Example - due to Brexit --> many businesses unlikely to invest in-growth whilst they dont know the full impact - To prepare - you can always set aside contingency fund, Or also do SWOT and/or PESTLE analysis

Question 13

What are some of the Characteristic an Entrepreneur needs?

Accepted Answer

- Self-confidence - Self-determination - Being a self-starter - Judgement - Commitment - Perseverance - Initiative

Question 14

Why would an entrepreneur need to be Self-confident?

Accepted Answer

- successful entrepreneurs are people who believe that they are going to succeed - they think they have a winning formula for their business

Question 15

Why would an entrepreneur need to have Self-determination?

Accepted Answer

successful entrepreneurs are ones who think they can take control of events going on around them -They can influence those events and turn them into something which will benefit their business

Question 16

Why would an entrepreneur need to be a Self-starter?

Accepted Answer

- Entrepreneurs are able to work independently and can make decisions. - they ave their own ideas how things should be done and are able to develop those ideas

Question 17

Why would an entrepreneur need to have Judgement?

Accepted Answer

- being able tot take in information and listen to advice - Able to see where the business may go in the future

Question 18

Why would an entrepreneur need to have Commitment?

Accepted Answer

- working longer hours and more stressful - successful entrepreneur are committed to what they do

Question 19

Why would an entrepreneur need to have Perseverance?

Accepted Answer

Entrepreneurs are able to get through the bad times and set backs

Question 20

Why would an entrepreneur need to have Initiative?

Accepted Answer

they dont allow events to overwhelm them by doing nothing -They are able to change and be proactive

Question 21

What are the skills required by an entrepreneur?

Accepted Answer

-Organizing -Communication Managing people -Financial management -Decision making -Negotiating -I.T. skills

Question 22

Why would an entrepreneur need to be organised?

Accepted Answer

- organising and co-ordinating a wide range of a wide range of resources order to get the business running, planning, scheduling, giving orders, prioritizing etc. - if things go wrong entrepreneurs will sometime be 'fire-fighting' that is resolving conflict, dealing with business issues and sorting out problems

Question 23

Why would an entrepreneur need to be able to communicate?

Accepted Answer

- interacting with a wide range of stakeholders eg. customers, employees, suppliers. - Charm, courtesy, and assertiveness are useful attributes - Be able to write letters ,memos and reports, fill in forms etc - Presentation skills may be needed for sales pitches

Question 24

Why would an entrepreneur need to be able to manage people?

Accepted Answer

- managing people is often one of the most difficult tasks when running a business. - Entrepreneurs need to recruit the 'right people' in the first place and then show clear leadership and direction - people are easier to manage when their needs are met and if they are treated with respect and value

Question 25

Why would an entrepreneur need financial management skills?

Accepted Answer

- involves people is often budgeting, cash-flow forecasting, chasing debts, keeping up-to-date financial records - the main aim is to make sure the business has enough money whenever it is needed

Question 26

Why would an entrepreneur need to have good decision making?

Accepted Answer

- most are low-level, day-to-day decision like what stock needs ordering - Some are strategic, which are important and have a long-term effects on the business e.g. whether to more premise to a new location - decision making and problem solving require entrepreneurs to process, analyse and evaluate information

Question 27

Why would an entrepreneur need to have negotiating skills?

Accepted Answer

- agreeing the terms of a contract such as agreeing a price for undertake some work or completing an order for a customer, negotiating with supplier and employees - They need to be able to get their point across in a calm and assertive manner, develop arguments with reasoning, know when to compromise and try to arrive at a settlement that is agreeable to both parties

Question 28

Why would an Entrepreneur need to have I.T. skills?

Accepted Answer

- Entrepreneurs will be able to run their business more efficiently if they have good I.T. skills - e.g. setting up filing systems, emailing stakeholders, using spreadsheets to prepare budget and cash-flow forecast etc.

Question 29

Why would people decide to set up a business?

Accepted Answer

- Financial motives --> profit is the driving force behind many entrepreneurs and most businesses would not exist if it wasn't for the likelihood of making profit - Non-financial motives --> some people set up businesses for other motives they see as important or even more important then money, they need money for the business to operate however the main driving force is non-financial

Question 30

What are some financial motives for setting up a business?

Accepted Answer

- profit maximization --> some entrepreneurs try to make as much profit as they possibly can in a given period of time --> main motivator is money and main focus is financial returns --> more willing to take bigger risks and try to marginalize the needs of other stake holders - Profit satisfying --> aim to make enough profit to maintain their interest in the business, dont go for maximum profits as they dont want the responsibility of expanding the business --> run a lifestyle business, this allows the entrepreneur to pursue other areas of their life e.g. family

Question 31

What some non-financial motive for setting up a business?

Accepted Answer

- Ethical stance --> to support their moral belief they possess e.g. vegetarian setting up a vegetarian - Social Enterprise --> trade with the aim of improving human and environmental well-being (non-profit organisation) e.g. Fair trade - Independence --> many people want to be their own boss, freedom to make their own decision - Home working --> benefits include time and expense spent travelling to work is elimated and they also enjoy more flexibility e.g. take breaks when you want

Question 32

What is an Article of Association?

Accepted Answer

a document that provides details of the internal running of a limited company

Question 33

What is a certificate of Incorporation?

Accepted Answer

a document that declares a business is allowed to trade as a limited company

Question 34

What is a co-operative?

Accepted Answer

a business organisation owned by its members, who have equal voting rights

Question 35

What is a deed of partnership?

Accepted Answer

a binding legal document that states the formal right of partners

Question 36

What is a Franchise?

Accepted Answer

a business model in which a business (the franchisor) allows another operator ( the franchisee) to trade under their name

Question 37

What is a lifestyle business?

Accepted Answer

a business that aims to make enough money and provide the flexibility needed to support a particular lifestyle for the owner

Question 38

What is limited liability ?

Accepted Answer

a legal status which means that a business owner is only liable for the original amount of money invested in the business

Question 39

What is a Limited partnership

Accepted Answer

a partnership where some members contribute capital and enjoy a share of the profit, but do not participate in the running of the business. at least one partner must have unlimited liability

Question 40

What is a memorandum of association?

Accepted Answer

a document that sets out the constitution and states key external details about a limited company

Question 41

What is a Mutual organisation?

Accepted Answer

a business owned by its members which are customers not stakeholders

Question 42

What is an Online business?

Accepted Answer

a business that uses the global communications infrastructure of the internet as a trading base

Question 43

What is a Partnership?

Accepted Answer

a business organisation that is usually owned by between 2-20 people

Question 44

What is the Primary sector?

Accepted Answer

production involving the extraction of raw materials from the Earth

Brainscape's Knowledge GenomeTM

1.5 Entrepreneurs and Leaders Flashcards

Brainscape's Knowledge Genome^TM