chapter 3 Flashcards
define an entrepreneur
a person who organises, operates and takes the risk for a new business venture
what are the benefits of being an entrepreneur
- independence - able to choose how to use time and money
- able to put own ideas into practice
- may become famous and successful if the business grows
- may be profitable and the income might be higher than working as an employee for another business
- able to make use of personal interests and skills
what are the disadvantages of being an entrepreneur
- risk- many new entrepreneurs’ businesses fail, especially if there is poor planning
- capital – entrepreneurs have to put their own money into the business and, possibly, f ind other sources of capital
-lack of knowledge and experience in starting and operating a business - opportunity cost – lost income from not being an employee of another business
name some of the characteristics of successful entrepreneurs
Hard working
risk taker
creative
optimistic
self confident
innovative
independent
effective communicator
why is being harding working important when being an entrepreneur
Long hours and short holidays are typical for many entrepreneurs to make their business successful
why is being a risk taker important when being an entrepreneur
Making decisions to produce goods or services that people might buy is potentially risky
why is being creative important when being an entrepreneur
A new business needs new ideas – about products, services, ways of attracting customers – to make it different from existing firms
why is being optimistic important when being an entrepreneur
Looking forward to a better future is essential – if you think only of failure, you will fail!
why is being self confident important when being an entrepreneur
Being self-confident is necessary to convince other people of your skills and to convince banks, other lenders and customers that your business is going to be successful
why is being innovative important when being an entrepreneur
Being able to put new ideas into practice in interesting and different ways is also important
why is being independent important when being an entrepreneur
Entrepreneurs will often have to work on their own before they can afford to employ others. Entrepreneurs must be well-motivated and be able to work without any help
why is being an effective communicator important when being an entrepreneur
Talking clearly and confidently to banks, other lenders, customers and government agencies about the new business will raise the profile of the new business
what is a business plan
A business plan is a document containing the business objectives and important details about the operations, finance and owners of the new business.
name some of the business start ups
Business idea and help, Premises, finance, labour and search
how does the government give support to business ideas and help
Organising training for entrepreneurs that gives advice, and support sessions offered by experienced business people
how does the government give support to business premises
‘Enterprise zones’, which provide low-cost premises to start-up businesses
how does the government give support to finance
Loans for small businesses at low interest rates Grants, if businesses start up in depressed areas of high unemployment
how does the government give support to labour
Grants to small businesses to train employees and help increase their productivity
how does the government give support to research
Encouraging universities to make their research facilities available to new business entrepreneurs
define capital employed
Capital employed is the total value of capital used in the business.
define internal growth
Internal growth occurs when a business expands its existing operations.
define external growth
External growth is when a business takes over or merges with another business. It is often called integration as one business is integrated into another one.
define a takeover
A takeover or acquisition is when one business buys out the owners of another business, which then becomes part of the ‘predator’ business (the business which has taken it over).
define a merger
A merger is when the owners of two businesses agree to join their businesses together to make one business.
