Entrepreneurial Motives and characteristics (1.5.2)

Question 1

What are the roles of an entrepreneur? (4 Things)

Answer 1

-Spot business opportunities
-Take calculated risks
-Create growth
-Organize business resources

Question 2

What are the financial motives for starting a business? (2 Things)

Answer 2

-Profit Maximization
-Profit satisficing

Question 3

What is Profit Maximization?

Answer 3

When the business just tries to achieve high profit in the short term with no intention of trying to increase it in the long term.

Question 4

How is Profit Maximization achieved? (4 Ways)

Answer 4

-Increasing Price
-Improving Productivity/Efficiency
-Cutting cost where possible
-Firing excess staff

Question 5

What is Profit Satisficing?

Answer 5

When the business increases their profit in the long-term. So carry out things that cost money which will be positive in the future but cost a lot at the start.

Question 6

How is Profit Satisficing achieved? (2 Ways)

Answer 6

-Increased Reinvestment
-Increased Expansion

Question 7

What are non-financial motives for starting a business? (6 Things)

Answer 7

-More control over working life
-Pursue interest/hobby
-Get to be boss
-Satisfaction of building something
-Get rewards for effort
-Flexible working

Question 8

What are the drawbacks of being an entrepreneur?
(6 Drawbacks)

Answer 8

-Occasional isolation
-Financial Pressure
-Hard work
-High stress levels
-High responsibility if something goes wrong
-Hard to have a sick day

Question 9

What are Social Enterprises?

Answer 9

Not-for-profit enterprises which have primary social objectives for community/business purposes rather than the aim of maxamising profit.