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Business Theme 1 Marketing and people > 1.5 Role Of Enrepreneurs > Flashcards

1.5 Role Of Enrepreneurs Flashcards

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1
Q

Benefits of businesses to society

A

-Creates employment & develops human capital
-Drive innovation through new/existing products
-Create wealth by providing returns on investments

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2
Q

Define enterprise

A

The skills and abilities to take risks and create profits and meet the needs ad wants of customers

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3
Q

Define Entrepreneur

A

A person who organises, operates and assumes the risk for a business venture

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4
Q

Define Start-up

A

a new business enterprise formed by one or more entrepreneur

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5
Q

What are the roles of entrepreneurs?

A

-Spot business opportunities
-Take calculated risks
-Acts as a catalyst for the creation & growth of new business enterprises

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6
Q

Popular sources of business ideas

A

-Business experience
-Personal experience
-observations

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7
Q

Describe an unincorporated business

A

-Owner is the business - no legal difference
-Owner has unlimited liability for business actions
-Most operate as a sole trader

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8
Q

Describe an incorporated business

A

-Legal difference between company and the owners
-Owners have limited liability
-Most operate as private limited companies

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9
Q

Define unlimited liability

A

Business owner is personally responsible for debts of business

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10
Q

Describe a sole trader

A

-An individual owning the business on his/her own
-Can employ people
-Owns all business assets and personally responsible for any debt (limited liability)

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11
Q

Advantages of a sole trader

A

-Quick & easy to set up
-Simple to run
-Minimal paperwork
-Easy to close /shut down

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12
Q

Disadvantages of operating as a sole trader

A

-Full personal liability
-Harder to raise finance
-Business is the owner
-Pay high tax rate

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13
Q

Describe partnerships

A

-Business started and owned by one or more people
-Partners own all business assets and owe all liabilities
-Legal apartnership agreements sets out how partnership is run
-Unlimited liability

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14
Q

Advantages of operating as a partnership

A

-Quite simple
-Minimal paperwork
-Expertise from both owners
-Greater potential to raise finance

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15
Q

Disadvantages of operating as a partnership

A

-Full personal liability
-Complicated to sell/ close
-Conflict between partners
-Poor decisions impact both partners

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16
Q

Importance of limited liability

A

-Important protection for shareholders in a company
-Shareholders can lose the value of their investment
-Limited liability doesn’t protect against fraudulent activity

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17
Q

Advantages of incorporated business

A

-Limited lability , protects shareholders
-Easier to raise finance though shares
-stable form of structure

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18
Q

Disadvantages of incorporated business (LTD)

A

-Greater admin cost
-Public disclosure of company’s information
-Directors legal duties

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19
Q

Describe public limited companies

A

-More specialist type of limited company
-Shares may be quoted / traded on stock market
-Subject to greater regulation in terms of public disclosure

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20
Q

Public sector organisations

A

-Provide services, funded by governments e.g NHS

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21
Q

Public sector companies

A

Business owned and controlled by the government e.g Network rail

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22
Q

Define Not-for-profit organisations

A

-Trade to benefit community, social aims as well as trying to make money e.g sports clubs

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23
Q

Define lifestyle businesses

A

-Used to describe a business that generates a “living” for the owners
-Business objectives less important

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24
Q

Define franchising

A

Franchisor grants a license to another business to allow it to trade using the brand / business format

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25
Q

Advantages of opening as a franchise

A

-Still own your own business
-Advice, support and training
-Easier to raise finance
-Buying power of franchisor
-Lower risk / failure

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26
Q

Disadvantages for running as a franchisee

A

-Initial fees , expensive
-Restrictions on actions
-Problems selling the business on

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27
Q

Advantages for franchisor

A

-Classic growth strategy
-Enables rapid geographical growth

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28
Q

Define opportunity cost

A

Measures the cost of a choice made in terms of the next best alternative forgone or sacrificed

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29
Q

Define Trade off

A

arises when having more of one thing potentially results in having less of another

30
Q

Define Intrapreneeurship

A

Intrepreneurship involves people within a business creating or discovering new business opportunities, which leads to the creation f new parts of the business or even a new business

31
Q

Ways to encourage intrapreeneurship in business

A

-Give employees ownership of projects
-Risk taking and failure acceptable
-Train employees in innovation
-Reward entrepreneurial thinking and activity

32
Q

Characteristics of a successful entrepreneur

A

-Passsion & Visionary
-Energetic, driven and resilient
-Self-starting and decisive
-Calculated risk-taker

33
Q

How do successful entrepreneurs deal with risks?

A

-Take calculated risks rather than gamble
-spread risk by diversifying
-Persistence

34
Q

What are the two financial motives for starting a business?

A

Profit maximisation & Profit satisficing

35
Q

Describe Profit maximisation

A

Desire to ear a substantial reward
-Long term profit
-Need to accept losses

36
Q

Describe Profit satisficing

A

Making a sufficient profit to enable a satisfactory standard of living, associated with ‘lifestyle’ businesses

37
Q

Non-financial motives for starting a business

A

-More control over working life
-Need for flexible working
-Want rewards from effort
-Pursue an interest or hobby

38
Q

Describe a Social Enterprise

A

-Trade in goods or services for social purpose
-The triple bottom line: financial, social and environmental
-Surplus goes towards one or more social aims

39
Q

Barriers to being an entrepreneur

A

-Occasional loneliness and isolation
-Can’t blame others when things go wrong
-Hard work
-Strain on family and social life

40
Q

What are business objectives

A

-The specific intended outcomes of business strategy
-End results
-Targets in order to achieve its primary aims

41
Q

Main functions of objectives

A

-A clear statement of what needs to be achieved
-A focus for all activity
-Targets for individual and group achievement
-A means of measuring performance

42
Q

How objectives can be used

A

-Provide clear focus for decision making
-Provide a target
-Motivate employees
-Reduce uncertainty

43
Q

What are SMART objectives

A

Specific
Measurable
Achievable
Relevant
Time Bound

44
Q

Strategic objectives

A

-Focused on long tern
-Set by the board
-Involve higher risk & uncertainty
-Stretching & challenging

45
Q

Tactical objectives

A

-Focused on short term
-Set by line management
-Limited resources invested
-Realistic & achievable

46
Q

Describe business survival

A

-Priority for new businesses
-Large proportion of start up fail in first few years
-Survival also common objective for: loss-making businesses, businesses hot by competitive pressures

47
Q

What are objectives relating to revenues

A

Revenue growth
Sales maximisation
Market share

48
Q

Define cost efficiency

A

Cost efficiency aims to achieve the most cost-effective way of delivering goods and services to the required level of quality

49
Q

Key benefits of cost efficiency

A

-Lower unit costs
-Higher gross profit margins
-Higher operating profits
-Improved cash flow

50
Q

What are profit objectives

A

-Specific level of profit
-Rate of profitability
-Profit maximisation
-Make profit margins

51
Q

What are employee welfare objectives

A

Staff retention
Quality of customer service

52
Q

Moving from entrepreneur to leader

A

-Some entrepreneurs characteristics are not always suitable for leading a bigger business
-Delegation is much more important
-Organisational design
-Many entrepreneurs become ineffective “bosses”

53
Q

Define business objectives

A

Statements of specific outcomes that are due to be achieved

54
Q

Business objectives are…

A

-The intended outcomes of business strategy
-Targets which the business adopts to achieve its aims

55
Q

Main functions of business objectives

A

-Clear statement of what’s to be achieved
-Focus for all activity
-Targets for individual and group achievement
-A means of measuring performance

56
Q

How can business objectives be used?

A

-Implement the mission
-Provide a clearer focus of decision making
-Provide a target
-Motivate employees

57
Q

Define mission

A

A qualitative statement of the businesses aims

58
Q

Define Aim

A

A long term plan from which business objectives are derived

59
Q

Define objective

A

A target which must be achieved in order to realise the aim

60
Q

What are corporate objectives

A

Objectives that relate to the business as a whole

61
Q

Purposes of corporate objectives

A

-Provides strategic focus
-Measures performance as a whole
-Informs decision making

62
Q

Define Functional objectives

A

Set for each key business function and are designed to ensure that the corporate objectives are achieved

63
Q

Factors influencing business objectives

A

-Age of the business
-Size & legal status
-Ownership
-Legislation

64
Q

What is the survival objective

A

-Priority for new businesses
-Established but loss making business
-Firms struggling to handle a shock in the external environment

65
Q

What does cost effienciency aim to achieve

A

Aims to achieve the most cost-effective way of delivering goods and services to the required level of quality

66
Q

What are strategic objectives

A

Focused on long term, set by the board, involve higher risk, difficult to change in the short term

67
Q

What are tactical objectives

A

Focused on short term, set by line management, low risk, realistic and achievable

68
Q

What are the revenue objectives

A

Revenue growth, sales maximisation and market share

69
Q

Key benefits of cost efficiency

A

Lower unit cost, higher gross profit margin, higher operating profits, improved cash flow

70
Q

What are the profit objectives

A

Profit maximisation, rate of profitability, exceeding profit margins

71
Q

What are employee welfare objectives

A

-Tend to be functional in nature
-Staff retention
-Quality of customer service

72
Q

Customer satisfaction objectives

A

Usually what successfulI businesses strive for

Business Theme 1 Marketing and people (5 decks)

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