Role of an entrepreneur 1.5.1

Question 1

What is an entrepreneur?

Answer 1

An individual who sets up and runs a new business and takes on the risks associated with the business.

Question 2

What do entrepreneurs do?

Answer 2

• Innovate and Invent
• Take Risks
• Organise
• Make Decisions

Question 3

Where do business ideas come from?

Answer 3

• Business experience
• Personal experience
• Lifestyles choice
• Spotting a gap
• Skills

Question 4

What is the process of setting up a business?

Answer 4

1) The Idea
2) Research
3) Planning
4) Financing
5) Location
6) Resources
7) The Launch

Question 5

What functions must entrepeneurs be able to do in order to run, expand and develop a business?

Answer 5

• Financial Management
• Administration
• Marketing
• Purchasing
• Managing People
• Productions

Question 6

What is intrapreneurship?

Answer 6

Employees within a business who have the freedom and opportunity to develop their ideas and use their creativity to innovate.

Question 7

How can entrepreneurs minimise risk?

Answer 7

• Carry out detailed research
• Produce detailed plans
• Analyse external influences
• Develop contingency plans

Question 8

What barriers to entrepreneurs face when setting up businesses?

Answer 8

• Lack of finance
• Lack of entrepreneurial skills
• Responsability of becoming an employer
• Legal Barriers
• Lack of ideas
• Aversion to risk
• Competition from large established businesses

Question 9

What must a business anticipate?

Answer 9

Risk and uncertainty

Question 10

How do entrepreneurs deal with risks?

Answer 10

• Entrepreneurs can control the level of risk
• Consider the probability that what they’d decide will have a negative effect on the business
• They can weigh this up against what they would gain if things went well
• Make a conscious decision

Question 11

How do uncertainties differ from risks?

Answer 11

They have no control over the nature of timings and so there is nothing to do to prevent these events. They may be able to make preparations to deal with the consequences.

They understand the nature of risk when they set up the business and use start-up capital. They know that if the business fails, they lost the investment put into it, and if the business does succeed, there will be higher risks.

Question 12

What external factors might be considered uncertainties?

Answer 12

• Health scares
• Political factors
• Commodity price shocks
• Changes in exchange rates
• Changes in legislation