Entrepreneurship Flashcards
What are four main roles that entrepreneurs do?
- innovating and inventing
- organisation
- risk taking
- decision making
Business experiences as a reason to start up a business
Some start up businesses due to skills learnt from their current jobs or professions
Personal experience as reasons to start up a business
This would be based of either a interest or a hobby
Skills as a reason to start a business
Some people set up businesses due to interpersonal skills, artistic or technical abilities
Lifestyle choices as reason to start up a business
Some people may set up a business in order tot be their own manager and control their own workload etc
Spotting a gap s a reason to start up a business
Some people may see an opportunity and in everyday life and decided that they can meet this need regardless of the risks
what are the seven steps in setting up a business
The idea The research The planning The financing The location The resources The launch
Why does research need to be done during the stages of setting up?
The viability of a business has to be researched, e.g doing market research and analysing completion to decided whether the idea will be successful .
Other research could involve meeting bankers and business owners, to explore their additional aiding
Location
This is dependent on the nature of the business, if it shall be online or physical store etc, where to keep factories etc
Launch
When the trading starts, some organise an opening event,, this will help them build public relations
Why does a business need financial management?
The business needs enough money to finance its operations , this will require managements To raise finance , manage its costs, profitability and cash flow.
What admin costs will an entrepreneur have to cover?
- insurance
- legal set up
- tax
- business records
What is intrapreneurship?
Refers to employees within the business who have the freedom and opportunity to develop their ideas and use their creativity to innovate
How do entrepreneurs and intrapreneurs differ ?
Intra carry non of the financial risks which enter carry
What sector are intras employed into?
Product development
What do intrpreneurs do?
Create new and exciting products
Keep big businesses moving forward
What are the advantages of employing intras?
- they can drive innovation and uncover new commercial opportunities
- a means of satisfying the self-actualisation needs of employees-this will help motivate staff and hopefully raise their productivity
- a number of rewards can be won if ground breaking products are achieved, this can attract free pr which will aid in promotion
- they get to experiment without the cost of failure , can use these entrepreneurial skills to become an entrepreneur
How can entrepreneurs reduce risk and uncertainty
- by carrying out detailed research
- producing detailed plans
- analysing external influences
- developing contingency plans
What are the barriers to success
- lack of entrepreneurial skills
- responsibility of becoming an employer
- legal barriers
- lack of ideas
- lack of finance
- aversion to risk
- competition
Why is lack of finance a barrier to success?
The failure rate can be high for new business and financial institutions cannot afford to lose mone, so they may be more reluctant in lending money
Give some examples of responsibilities that come with being an employer
- paying regular wages to employees
- controlling sick pay/ holiday pay etc
- health and safety issues must be considered
- employers have to pay national insurance contributions
- new employees need training
Aversion to risk
Essentially a psychological barrier to enterprise and one that is difficult to overcome
List the characteristics of an entrepreneurs
- self-confidence
- self-determination
- self-starter
- initiative
- commitment
- perseverance
Skills of entrepreneurs
- organisation
- negotiating
- it skills
- managerial skills
- communication
- financial management
- decision making
List three IT skills and entrepreneur will require
- using spreadsheets for budgets, cash flow forecasts etc
- setting up a business website
- communication with stakeholders
What are the two motives of why people start a business
- financial
- non-financial
List the financial motives
- profit maximisation
- profit satisfying
List all the non-financial motives
- ethical stance
- independence
- social enterprise
- home working
What is profit maximisation
- generating as much wealth as possible
- motivated by the financial returns
- therefore more likely to take risks
What is profit satisfying
-to generate enough income for a comfortable lifestyle
Ethical stance
-running a business to support their ethical beliefs and principles e.g climate change
Independent and home work
They often want flexibility and full control of running their own business
