Financial motives (entrepreneurs)

Question 1

Profit maximisation

Answer 1

Def- Making as much profit as possible
-reduce costs and increase sales revenue

Question 2

Profit satisfying

Answer 2

Def- Making enough profit but not pushing to maximise it
- may not be motivated to keep increasing profit year after year
- if shareholder then they only want to make them satisfied and not over

Question 2

Develop emotional intelligence

Answer 2

• The ability to identify and manage your own emotions as well as recognise emotions of others and be able to respond to them accordingly

Question 3

Risks and uncertainties

Answer 3

Uncertainties - usually unpredictable and beyond entrepreneurs control
Risks - factors that arent expected but can be quantified

Question 4

Sole Trader

Answer 4

• Individual trading on their own name
• self employed
• fully responsible for their financial control
  AD- Freedom - the sole trader is own boss and has complete control over decisions
  profit - the sole trader is entitled to all the profit made in the business

DIS- Risk - theres no one to share the overall responsibility of running the business with
unlimited liability - the sole trader is responsible for all debts of business

Question 5

Private Limited company (Ltd)

Answer 5

• Means the owners have more financial protection if the company goes bust
  -Owned by shareholders
  owners have to agree before anyone sells or buys shares
• has the potential for growth may opt for stock market flotation and transition into a PLC

Question 6

Public limited company (PLC)

Answer 6

• anyone can buy shares in the business, the shares are sold publicly on the stock market
• general public can buy shares in the business

Question 7

Dividends

Answer 7

• Are a proportion of the profits earned by the company which are split and paid out to the shareholders
• Paid by a fixed amount per share
• All shareholders are payed dividends in return for their investment