Motives And Characteristics Flashcards
Definition of entrepreneur
An entrepreneur is a person who sets up a business and takes risks in the hope of a profit, reward or for a social purpose e.g. to help the community
Definition of Entrepreneurial characteristics
• An entrepreneurial characteristic is the skill, quality or trait of the person starting the business e.g. creativity
Definition entrepreneurial motives
An entrepreneurial motive is the factor that drives a person to start a business e.g. to be their own boss
Entrepreneurial characteristics
- Creativity
- Hard-work
- Resilience
- Initiative
- Self-confidence
- Risk-taking
Creativity characteristic
Entrepreneurs need to be creative people, it helps when designing or inventing new products or services
• In dynamic markets the consumers are faced with a huge variety of products from trusted brand names
Hard work characteristic
Starting a business can mean hard work. Some entrepreneurs will put 100s of hours into their own business to get it off the group and may have to continue working long hours to get the business established
Resilience characteristic
Resilience means; strong, hardy, tough, robust, durable, feisty, quick to recover.
• An entrepreneur may get many knock backs before their business is a success.
Initiative characteristic
• Initiative means; inventiveness, enterprise, ingenuity, or resourcefulness
• Many entrepreneurs may start a business because they have a good idea and want to take it to market
Self-confidence characteristic
Self-confidence is how an entrepreneur feels about their own abilities.
• It is easy for an entrepreneur to become frustrated and give up if they lack self-confidence in their own ability and in their products and services
Risk taking characteristic
Entrepreneurs who want to start their own business will need to be able to take a risk
• There is a risk of leaving a secure job to start up on your own
Entrepreneurial skills
- Communication
- Team working
- Problem solving
- Organisation
- Numeracy
- IT
Communication skills
Entrepreneurs need to be good communicators
• They may need to write exciting product descriptions on their websites
• They may have to talk to customers or clients fact to face or on the phone
Team working skills
An entrepreneur may decide not to work alone but as part of a pair or a team
• Working with others has advantages and disadvantages
Problem solving skills
Entrepreneurs will come across many problems when setting up and running their business, they will need to be good at working out cost effective solutions that help to move the business forwards.
Organisation skills
Entrepreneurs need to be organised
• When first staring the business they will have to develop a range of systems for dealing with enquiries, suppliers and orders from customers
Numeracy skills
They will need to complete their own tax returns when they first start. They will have to balance sales books, keep records of goods and services purchased to keep the business running.
IT skills
Entrepreneurs need to be IT literate
• If the business is online they will need some web design skills
Profit maximisation
An entrepreneur may aim to make the highest amount of profit possible
• This is the difference between revenue and costs, so they will seek to minimise costs and maximise revenue
• The advantages to a sole trader are larger wages can be drawn from the profit
Profit satisficing
An entrepreneur may aim to make just enough profit to keep the business moving plus another aim at the same time
Non financial motives
1.Independence
2. Flexibility
3. Ethical reasons
4. Social purpose
5. Personal challenge
Indépendance
For many entrepreneurs the idea that they can work for themselves and no longer have to commute to work for someone else is all the motivation that they need to set up their own business
Flexibility
• Many entrepreneurs seek to start their own business to gain flexibility in their life
• It can be hard to balance the needs of a family with the requirements of work
Ethical reasons
• For example:
• Environmental trading at their
heart e.g. Starbucks
• Animal rights e.g. Body Shop
• Fair wages for workers in African nations e.g. Fairtrade products
• Organic, anti-GM crops
• Ethics e.g. Ethical superstore
Social purposes
Social enterprises are businesses trading for social and environmental purposes.
• (Learn that bit)
• Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social and/or environmental purpose is absolutely central to what they do.
Personal challenge
Some entrepreneurs may find working for another business as boring and unchallenging. They may decide to set up their own business instead
