Chapter 20- Entrepreneurial Motives and Characteristics Flashcards
Characteristics of an entrepreneur
• Self-confidence – successful entrepreneurs are people who
believe they are going to succeed
• Self-determination – can take control of events going on around
them
• Judgement – the business environment is one who Is taking in
information and listening to advice – at the same time they are
able to see where the business might go in the future
• Commitment –Entrepreneurs work longer hours than those with
a normal job – running your own business can sometimes be
more stressful because of the risks that are always present
• Perseverance – all businesses have successes and failures –
there is always an element of risk that their business could
perform poorly or even fail – therefore successful entrepreneurs
have to show perseverance
• Initiative – able to take the initiative in situations
Skills Required
• Organising – entrepreneurs play an important organisational role – they
have to project manage the setting up and running of their business
ventures – this involves organising and co-ordinating a wide range of
recourses in order to get the business up and running
• Financial Management – this is a very important skill and if it Is neglected
can lead to the demise of the business – the main aim of financial
management is to make sure that the business has enough money
whatever is needed
• Communication – entrepreneurs will need to interact with a wide range
of different stakeholders – these might include customers, employees,
suppliers, the local community and the authorities
• Managing People – as a business grows – there will be a need to take on
more staff – it is often said that managing people is one of the most
difficult tasks when running a business
• Decision Making – running a business will require a lot of decision
making – the level of decisions will differ – most decisions are about low
level, day to day issues such as what materials or stock to order – which
tools to use and where – in contrast, a small number of decisions are
strategic – these are important and can have long term effects on the
business – an example might be whether to move premises to a new
location
• Negotiating – inevitably entrepreneurs will spend some of their time
negotiating – this often means agreeing the terms of a contract, such as
agreeing a price for undertaking some work or completing an order for a
customer – however, negotiation might be also needed when dealing
with suppliers and employees
Financial motives for setting up a business
Profit maximisation – Some entrepreneurs are motivated by money and their key focus is the financial return of their efforts – it might be argued that entrepreneurs that try to maximise profits are likely to take bigger risks – this is because there is usually a direct relationship between risk and reward
Profit satisficing – some entrepreneurs might take a different approach to profit – for example they may aim to make enough profit to maintain their interest in the business – this is called profit satisficing – one reason why some entrepreneurs do not seek to maximise profits is because they do not want to take extra responsibility of expanding their business – which is often required to make more profit
Non-financial motives
Ethical stance - A minority of people set up a business in support of a moral beliefs they possess – for example, a vegetarian who believes it is wrong to kills animals for meat may open up a vegetarian restaurant to encourage a smaller consumption of meat
Social enterprise - These are organisations that trade with the aim of improving human and environmental well-being – they are sometimes referred to as non-for-profit organisations
Independence - A lot of people want to be their own boss – this is an important non-financial motive for setting up a business – these entrepreneurs are driven by the desire to be independent -the freedom to make all the decisions when running a business is very appealing – many people dislike being told what to do
