1.5.1/ 1.5.2 Role of an Entrepreneur, Motives and Characteristics Flashcards
what is a business?
an organisation that exists to provide goods and services on a commercial basis to customers
goods
physical products
services
intangible products
who usually sets up a business?
entrepreneur`
entrepreneur
a person who is willing and able to create a new business idea or invention and takes risks in pursuing success
what can successful entrepreneurs do?
they can identify and pursue opportunities, create value for customers and build thriving businesses
what do entrepreneurs do?
organise resources
make business decisions
take risks
entrepreneurs role of organising resources
-they must gather and coordinate the necessary resources to start and operate a business
entrepreneurs role of making business decisions
making decisions that determine the success or failure of their business
-prices to charge
-making wrong decisions can lead to wasted resources, lost opportunities and ultimately business failure
intrapreneurship
the practice of promoting entrepreneurial thinking and behaviour within an existing business
what does intrapreneurship involve?
empowering employees to think and act like entrepreneurs, to take risks, innovate and develop new ideas and projects that may benefit the business
-can drive growth and competitive advantage
examples of google using intrapreneurship
in 2004, google introduced Gmail a free email service that quickly gained popularity
-20% allows employees to spend 20% of their work time on personal projects
-gmail was developed by a team of google employees as part of their 20% time
how can a business encourage intrapreneurship?
encourage entrepreneurial activity
give employees ownership of projects
make risk taking acceptable
train employees in innovation
encourage collaboration
reward entrepreneurial thinking and activity
why can entrepreneurship be challenging?
many barriers can prevent individuals from starting or growing a successful business
barriers to entrepreneurship
-entrepreneurial capacity
-fear of failure/ lack of confidence
-lack of training
-access to finance
how can entrepreneurial capacity be a barrier?
the individuals’ ability to think creatively, take risks and identify and seize business opportunities
how can access t finance be a barrier?
to secure funds necessary to start or grow their business can be hard
-lack of finance is a massive problem for entrepreneurs
how can lack of training be a barrier?
a range of skills is necessary to start and grow a successful business
e.g. marketing, finance, management and leadership
-it can be hard to develop a viable business plan, attract customers, or manage their finances effectively.
how can fear of failure or a lack of confidence be a barrier?
it is very risky, therefore they may worry about the financial risks involved in starting a business or fear the stigma of failure
what is risk?
something an entrepreneur can plan for
-the probabilities of outcomes are known or considered
-usually the greater the risk the greater the reward in business
what is uncertainty?
caused by unexpected factors outside of the entrepreneur’s control even though they are sometimes predictable
examples of factors that can cause uncertainty?
environmental changes
economic changes
new competitors
changes in local and national legislations
changes in the political party
what is enterprise?
the creation of a business to meet the needs and wants of customers. the skills and abilities to take risks and create profits
what skills are required by entrepreneurs?
-communication
-team working
-problem solving
-organisation
-ICT
-delegation
