chapter 1 Flashcards
entrepreneurship
-entrepreneurship is generally considered to refer to the process whereby a person creates and operates a new business, usually in response to opportunities, while taking on the risk of the venture in the hope of making a profit.
-may involve the entrepreneur investing their time, money or skills into launching and managing the business.
ENTREPRENEURSHIP
persuing business oppertunities
- gaps in the market, changes in customer needs, technological developments or changes in global markets.
ENTREPRENEURSHIP
innovation
-change, improvement and/or transformation.
-Innovation is frequently used by entrepreneurs as a source of business opportunity — to meet the needs and wants of customers or to take advantage of change.
ENTREPRENEURSHIP
seeking growth
- seek new trends, explore new products and new approaches so that the business increases in size. — Growth is necessary for the survival of a new business.
-Becoming bigger would be expected to lead to increasing sales and market share, and greater profit
The personal motivation behind starting a business:
-financial independance
-Establishing a business means that they will not have to rely on an income from an employer or be dependent on other people to pay for living expenses.
The personal motivation behind starting a business:
-personal independance
-not wanting to work for another person
- ‘Being my own boss’
- desire the freedom to choose when and where they work, the tasks they undertake, with whom they work and whether to work from home.
The personal motivations behind starting a business
- financial and personal independance, to make a profit, to fufil a market need, to fufil a social need.
market need
Market need refers to the products that customers require that may not be available.
social need
-This refers to the production or selling of goods and services for the purpose of making the world (or the community) a better place.
examples of typical social needs are:
-providing opportunities for local unemployed people
-developing skills, providing vocational training or lifelong learning opportunities for disadvantaged people in the community
-creating access to a better quality of life for disadvantaged members of the community
-focusing on some sort of environmental need.
Characteristics of successful business managers and business entrepreneurs:
-business managers
-A business manager runs a business on a day-to-day basis so that it makes a profit.
-They prefer to minimise risks and make calculated decisions where the outcome is reasonably clear.
-A business manager might have an idea for solving a problem or meeting a need in order to satisfy a target market.
Characteristics of successful business managers and business entrepreneurs:
-Business entrepreneurs
-An entrepreneur is generally considered to be a person who is willing to seize opportunities to start and operate a business, and is prepared to take risks in the hope of making a profit.
-Business owners displaying entrepreneurial behaviour will also establish a shared vision and will demonstrate initiative, innovation and enterprise
entrepreneurs tend to have:
- a shared vision, initiative, and innovation and Enterprise.
A SHARED VISION - This gives the business a clear direction. Having a shared vision means that everyone in the business works together, as a team, to develop and then accomplish a goal.
INITIATIVE - They will take the first step in a series of actions or in a process.
INNOVATION AND ENTERPRISE - Innovation is either adding a new product to an existing product line, or significantly improving an existing product or process.
Enterprise is the effort made by someone to creatively or boldly achieve something new.
business oppertunities:
innovation, market oppertunities, changing customer needs, research and development, technological development, global markets.
business oppertunities:
-changing customer needs
- changing incomes
- changing fashions and tastes
- changing prices of complementary and substitute goods and services.
- changing population
- changing expectations about the market, including future prices and incomes.
- changes in the number of potential customers
business oppertunities:
-global markets
-Goods and services are exchanged between businesses and customers across the world.
-This provides opportunities for people seeking ideas for new businesses because it means that the potential business owner can have access to more customers and more sales.
The importance of goal setting
-Setting goals can also allow the potential business owner to develop their ideas for a business.
-Setting goals is an important step in helping a business realise its vision of where it wants to be in the future
SMART GOALS
SPECIFIC- goals should be clear and focused
MEASUREABLE- should be quantifiable
ATTAINABLE- challenging but realistic
RELAVENT- should be worthwhile
TIME BOUND- a deadline or time limit
financial goals
- making a profit
- increase sales
- increase market share
- expand the business
- maximising the return on investment
- improving the way that the business operates
social goals
- community service
- provision of employment
- social justice
- ecological sustainability
personal goals
-Prospective business owners usually have a number of personal goals.
-Personal goals for business owners are not normally made public
Decision-making in business
Decision-making is an important skill for a prospective business owner to have when taking a business idea and making it a reality. Decision-making involves identifying available options and then choosing one course of action from the alternatives.
STEP 1 -develop goals
STEP 2 -outline the facts
STEP 3 -identify alternative solutions
STEP 4 - analyse that alternatives
STEP 5 -choose one alternative and implement it
developing a business concept
Inspiration for ideas can be generated by:
-listening to people, particularly for ideas on the goods or services people want
-reading magazines and books and researching on the internet
-visiting displays and exhibitions in areas such as new technology or new products from overseas
-accessing government statistics and research information
-identifying a ‘gap in the market’ — that is, a demand not currently being satisfied
-determining improvements that could be made to an existing product.
The relationship between business opportunities and business concept development
The development of the business concept is when the prospective business owner takes an idea that has arisen from an assessment of possible opportunities, and begins to turn it into an actual business.
bussiness oppertunity — business concept development
Protecting a business idea
TRADEMARK- (gives the owner exclusive rights for commercial purposes) This is a right granted over a letter, word, phrase, number, sound, smell, shape, logo, picture or aspect of packaging that a business will use to represent it’s products and services.
PATENT- This is a right granted for any device, substance, method or process that is new, inventive and useful.
COPYRIGHT- This is free and automatic protection of original works, such as writing, music, art, films, sound recording, broadcasts and computer programs.
DESIGN RIGHTS- These are rights given to the owner to commercially use, licence or sell a design (logo, branding, packaging, new invention or new technology.)
DOMAIN NAME- A potential owner can register a domain name (the business’s unique address on the internet) so that nobody else can register it.
