1.5 entrepreneurs & leaders M Flashcards
musab
what is an entrepreneur?
an entrepreneur is a person who sets up a business and takes risks in the hope of a profit or reward
what are some roles of an entrepreneur?
market research
create jobs
be innovative
identify opportunities
making predictions
reduce risks
what is an entrepreneurial motive?
an entrepreneurial motive is the factor that drives a person to start a business eg. be their own boss
what is an entrepreneurial characteristic?
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
what are some financial and non financial motives to start a business?
financial:
profit maximisation
profit satisficing
non financial:
pursue interests
make use of strengths / skills
to be your own boss
independence
to benefit society
what are some barriers to entrepreneurship?
lack of finance
lack of skills / bravery
fear of being unsuccessful
lack of ideas availability of materials
risks involved
what is intrapreneurship?
the act of behaving like an entrepreneur while working within a large organisation.
what is an intrapreneur?
an employee given authority and support to create a new product with no concern about failure
what are the benefits of intrapreneurship to the business and to the individual?
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
what are the advantages and disadvantages of setting objectives?
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
whats the difference between invention and innovation?
invention - inventing something that hasn’t been made before. new ideas, concepts, products
innovation - new idea, taking invention to the market and selling it
whats the difference between an aim and objective?
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.
what is a mission statement?
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
whats the difference between an incorporated and unincorporated business?
incorporated - business and its owners are separate legally (limited liability)
unincorporated - business and its owners are the same legally (unlimited liability)
what is a trade off?
when having more of one thing means having less of another. a choice needs to be made when you can’t pursue both options
what is an opportunity cost?
the benefit sacrificed for the next best alternative when a choice is made between two options.
why might a business change its objectives?
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
define public limited company
a large business that can advertise its shares to the public and ,therefore, raise money from the stock market. they have limited liability
define private limited company
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
whats the difference between a franchise, a franchisee and a franchiser?
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 business that grants licenses to other businesses to operate under its brand name and sell its products or services.
define limited liability
owner’s personal assets are not at risk if the business goes into debt. they can only lose the money they invested
define unlimited liabilty
owner’s personal assets are at risk if the business goes into debt.
define risk
the possibility that the business will make a lower than expected profit or a loss.
eg. cyber security, changing laws
define uncertainty
when businesses are unable to predict external shocks or future events.
eg. how many staff will leave, how ill the market respond to marketing mix
