Entrepreneurial Motives And Characteristics

Question 1

What’s an entrepreneur

Answer 1

A person who sets up a business

Take on the risks of new business activity to gain a reward (profit)

Question 2

Key roles for an entrepreneur

Answer 2

1) Creating and setting up the business
2) Running and developing the business
3) Bringing innovation to the business
4) Overcoming barriers to entrepreneurship
5) Anticipating risk and uncertainties

Question 3

Common characteristics for an entrepreneur

Answer 3

• Someone with initiative- analyse the best course of action, without being told
• Hard-working
• Creative
• Self-confident
• Risk-taker
• Resilient

Question 4

Skills needed to be an entrepreneur

Answer 4

• Good communication skills
• Good team-working skills
• Good problem-solving skills
• Good numeracy skills
• Good organisation skills
• Good IT skills

Question 5

Two types of financial motives for profit,

Name them

Answer 5

Profit maximisation

Profit satisficing

Question 6

What’s profit maximisation

Answer 6

Means making as much profit as possible

Question 7

How can you achieve profit maximisation

Answer 7

• Achieved by reducing costs to their minimum, and increasing sales revenue to its maximum

Question 8

What’s profit satisficing

Answer 8

• Means making enough profit, but not pushing to maximise it

Question 9

What type of business is a profit satisficing business, and why do these happen

Answer 9

Profit satisficing businesses are made because if there are no shareholders, the entrepreneur may be happy to make enough profit so they can live an enjoyable lifestyle

• May not be motivated to keep increasing profits year after year
• This type of business is called a lifestyle business

Question 10

Non-financial motives for an entrepreneur

Answer 10

• Crave the independence
• Motivated by the flexibility
• Work from home
• Enjoy the challenge of building a business
• Motivated to make a difference to a social problem, if building a social enterprise

Question 11

Why would an entrepreneur change to a leader

Answer 11

If the business is a success, the business will grow, more staff will be employed

If there’s more staff, the entrepreneur has to develop into a leader

Question 12

Name the 3 things that entrepreneurs have to be prepared for during the transition to a leader

Answer 12

• Delegate responsibility= To other members of staff to manage functions of business
• Develop emotional intelligence= Ability to identify and manage your own emotions as well as to recognise the emotions of others and be able to respond to them appropriately
• Become less reactive= When the business managed by an entrepreneur they could be very reactive- they could make decisions quickly and instinctively. With more staff they cannot