entrepreneurial motives and characteristics Flashcards
1
Q
common characteristics of an entrepreneur
A
- understanding of the market
- determination
- passion
- resilience
- cope with risk
- financial skills
2
Q
what are the 2 financial motives for starting a business?
A
- profit maximisation
2. profit satisficing
3
Q
what is profit maximisation?
A
- for the long term the best way to maximize profits may be to satisfice in the short term this means accepting a lower profit, knowing that it would build loyal customers and repeat purchases
- seeking to get the most profit
4
Q
what is profit satisficing?
A
to find the ideal blend between different pressures therefore finding the right profit is not the biggest
- small business is more likely to do this than maximization
- entrepreneur takes fewer risks
- trade-off is lower returns
- long term success to build a brand or a reputation
5
Q
what is a social enterprise?
A
- trade in goods or services for a social purpose
- the triple bottom line: financial, social, environmental
- the finance goes towards one or more social aims
6
Q
downsides of being an entrepreneur
A
- loneliness and isolation
- financial pressure
- hard work
- strain on family and social life
- higher stress levels
- roller coaster of emotions
- cant take days off when sick
7
Q
non-financial motives for starting a business and becoming an entrepreneur
A
- independence
- home working
- pursue an interest or hobby
- dislike hierarchy
- satisfaction from building something
- escape an uninteresting job
- ethical stance
8
Q
why is ethical stance important?
A
- attracts good publicity, especially social media
- encourages higher sales even if prices are high
- with profits high enough to support the ethics
9
Q
why do businesses profits maximise?
A
because profit can be used to:
- pay higher wages
- used in research and development
- enables savings to survive the economic downturn
- about to float shares in stock market, therefore, higher profits less chance of takeover
