Entrepreneurs Flashcards
What is an entrepreneur?
A person who sets up a business. They take on the risks of new business activity with the aim of gaining a reward (profit).
Why are they important?
They are really important as without them there would be no new businesses.
What are entrepreneurs key roles?
Creating and setting up a business, running and developing a business and brining innovation to the business world, as well as overcoming barriers to entrepreneurship and anticipating risk and uncertainties.
Explain the role of creating and setting up a business. (3stages)
- Identify gap in market and need for product can do market research.
- write a business plan once they are confident they have a good idea and do thorough research to make sure they have covered everything. Such as their marketing mix and finance requirements as well as legal ownership.
-They then need to raise money to start the business and acquire the resources needed to operate.
Explain the process of running and developing a business
After stage one, the owner needs to keep the business operational through things like keeping up to date with law, sales and marketing techniques and accounting. They will continually do MR to check what may affect their business.
-They will need to set and update their aims and objectives as the business grows to make sure they are on the right track.
- As growth increases, they will have to employ more people to help manage the business.
How do entrepreneurs bring innovation to the business world?
They need to innovate - new products or ways of producing as well as taking risks to make their ideas a reality.
-They may employ and encourage staff to innovate and allow them to take risks which can be done across the whole business to create the best method.
What is intrapreneurship
When an employee shows entrepreneurial skills within a business. E.g. can find new software for a business to use or create small scale products of their own that may benefit the business.
What are some barriers to entrepreneurship? And what is the process of an entrepreneur overcoming this?
Lack of money usually due to high start up costs (tech) - entrepreneurs have to find ways to raise capital.
Lack of confidence- some people are too afraid of failure and loosing their security - an entrepreneur needs to have strong belief in themselves and their idea and perpetuate this to others to make them support the idea.
Lack of training/know how - overcome this by learning as much as they can before starting - approved courses or work exp.
Lack entrepreneurship - lack the ability to see, exploit and capitalise on gaps. An entrepreneur will have to encourage employees to put forward ideas or invest more into creativity.
Explain the role of anticipating risk and uncertainty as an entrepreneur.
All business decisions have an element of risk - a good entrepreneur will consider the probability of a risk negatively affecting their business and weigh this against the benefits of it going well and the chances of that occurring.
- An entrepreneur should look to minimise risks prior to starting (MR). It’s also the case that where more can be gained, there is more risk - e.g starting in a completely niche market with no competition.
- Although uncertainties cannot be controlled or predicted, they can be anticipated (worst case scenario planning or keeping up with predicted markets, good acid test ratio incase stock plummets.)
What are common entrepreneurial characteristics?
Initiative - being able to analyse and act on their own.
Hard worker
Creative - keeps the business flowing.
Self confidence- needs to believe to achieve.
Risk taker - need to try things without a guarantee of success to achieve it often.
Resilience - things will go wrong - an entrepreneur must not stop despite that for the business to succeed.
What skills do entrepreneurs need to succeed?
Good communication skills.
Team working
Problem solving skills
Numeracy and accounting skills
Organisational skills to keep operational.
Good IT skills.
