1.5 entrepreneurs & leaders

Question 1

what is an entrepreneur?

Answer 1

an entrepreneur is a person who sets up a business and takes risks in the hope of a profit or reward

Question 2

what are some roles of an entrepreneur?

Answer 2

market research
create jobs
be innovative
identify opportunities
making predictions
reduce risks

Question 3

what is an entrepreneurial motive?

Answer 3

an entrepreneurial motive is the factor that drives a person to start a business eg. be their own boss

Question 4

what is an entrepreneurial characteristic?

Answer 4

a skill, quality or trait of the person starting the business and what makes them successful / different
eg. hardworking, resilient, creative, self-confident, risk taker

Question 5

what are some financial and non financial motives to start a business?

Answer 5

financial:
profit maximisation
profit satisficing

non financial:
pursue interests
make use of strengths / skills
to be your own boss
independence
to benefit society

Question 6

what are things an entrepreneur will need to carry out daily to keep a business running?

Answer 6

continue to learn
speak to clients and suppliers
manage employees
manage production
recruitment

Question 7

how can a business expand / develop in the future?

Answer 7

franchise
investments
retained profits
open new stores
innovation
hire staff

Question 8

what are some barriers to entrepreneurship?

Answer 8

lack of finance
lack of skills / bravery
fear of being unsuccessful
lack of ideas availability of materials
risks involved

Question 9

what is intrapreneurship?

Answer 9

the act of behaving like an entrepreneur while working within a large organisation. they are an employee who is given authority and support to create a new product without being concerned about whether or not the product will generate revenue.

Question 10

what are the benefits of intrapreneurship to the business and to the individual?

Answer 10

business:
use experience to improve business
new ideas for business
no losses in revenue if product fails
higher motivation - higher productivity

individual:
feeling valued by the company
guaranteed income
no risks involved
no stress if product fails
gain experience

Question 11

what are the advantages and disadvantages of setting objectives?

Answer 11

advantages:
>measure progress
>communicate and assign responsibilities to employees
>guidance and direction - everyone has a purpose and is focussed

disadvantages:
>external factors eg. changes in economy may slow down progress
>narrow focus may limit innovation and prevent exploration
>difficult objectives can be demotivating

Question 12

whats the difference between invention and innovation?

Answer 12

invention - inventing something that hasn’t been made before. new ideas, concepts, products

innovation - new idea, taking invention to the market and selling it

Question 13

whats the difference between a risk and an uncertainty?

Answer 13

risk - the possibility that the business will have a lower than expected profit or loss

uncertainty - when a business is unable to predict external shocks or future events

Question 14

whats the difference between an aim and objective?

Answer 14

aim - where the business wants to go in the future, its goals. a statement of purpose

objective - stated, measurable targets of how to achieve aims.

Question 15

what is a mission statement?

Answer 15

sets out the business vision and values that enables employees, managers, customers and even suppliers to understand the underlying basis for the actions of the business

Question 16

whats the difference between an incorporated and unincorporated business?

Answer 16

incorporated - business and its owners are separate legally (limited liability)

unincorporated - business and its owners are the same legally (unlimited liability)

Question 17

what is a trade off?

Answer 17

when having more of one thing means having less of another. a choice needs to be made when you can’t pursue both options

Question 18

what is an opportunity cost?

Answer 18

the benefit sacrificed for the next best alternative when a choice is made between two options.

Question 19

what are some business objectives?

Answer 19

survival - new businesses
profit maximisation - established businesses
sales growth / maximisation
customer satisfaction
cost efficiency

Question 20

why might a business change its objectives?

Answer 20

already achieved their objective and needs to move on

competitive environment may change - competitors launch new products

technology changes - sales and production targets might need to change

Question 21

define public limited company

Answer 21

a large business that can advertise its shares to the public and ,therefore, raise money from the stock market. they have limited liability

Question 22

define private limited company

Answer 22

a business where shares are not publicly traded and are typically owned by family and friends. shares can only be sold if all shareholders agree. they have limited liability

Question 23

whats the difference between a franchise, a franchisee and a franchiser?

Answer 23

franchise - type of business that is owned and operated by an individual or group, but it operates under the name and brand of a larger company
franchisee - an individual or group who buys the right to operate a business under the name and brand of a larger company
franchiser - a company that grants a license to an individual or group to operate a business using their brand, products, and business model

Question 24

define limited liability

Answer 24

owner’s personal assets are not at risk if the business goes into debt. they can only lose the money they invested

Question 25

define unlimited liabilty

Answer 25

owner’s personal assets are at risk if the business goes into debt.