Unit 1 AOS 1 Flashcards
What is entrepreneurship?
the process whereby a person creates and operates a new business, usually in response to opportunities, while taking on the risk of the venture in the hope of making a profit ( may involve taking risks such as investing time, money and skills)
3 significant ideas related to entrepreneurship are?
- pursuing business opportunities
- innovation
- seeking growth
what is a Business opportunity?
a set of circumstances that presents itself as an avenue to success
examples of business opportunities?
- gaps in the market that no-one else has tapped into
- changes in customer needs
- technological developments
- changes in global markets
how does the pursuit of opportunities help with a business?
An entrepreneur converts these opportunities into manageable business ideas and makes the idea a reality.
what is innovation?
either creating a new good, service or process, or significantly improving an existing one
what does innovation involve?
change, improvement and/or transformation
what do entrepreneurs use for innovation?
flair, imagination and creativity to develop new ways or products
when seeking growth what will an entrepreneur do?
seek new trends, explore new products and new approaches so that the business increases in size
why is growth is necessary for the survival of a new business?
Becoming bigger would be expected to lead to increasing sales and market share, and greater profit.
what will an entrepreneur have when seeking growth?
An entrepreneur will have a vision of what the business will be like in the future. Setting clear goals, will give the business direction towards this vision.
what are the personal motivations for starting a business?
- Desire for financial and personal independence
- To make a profit
- To fulfil a market need
- To fulfil a social need
what is Financial independence?
refers to when someone can support a lifestyle using the business earnings without having to be employed or be dependent on others
what is Personal independence?
refers to when someone has control of everyday life decisions and activities including working hours, conditions, roles and tasks
what is a profit?
Profit is the money left once the expenses have been deducted from the revenue
when does profit come?
it may not come immediately especially in the start up phase, but the goal is to earn more in the long run
who keeps the profit?
- In a sole trader business all profits are kept by the owner.
- In a partnership business, profits are divided between the owners.
- In a social enterprise at least 50% of the profits must be donated to the social cause. The rest is often donated or used by the owners to further the social aims of the enterprise
ways to increase profit?
Increasing revenue or Minimizing expenses
what is fulfilling a market need?
- Recognising that there is demand for a product that is not currently available at all, or in this country
- A gap in the market
- The invention of a new product or the innovation of an existing one
what is fulfilling a social need?
The motivation to establish a business to making the world (or the community) a better place.
what are examples of social needs?
- opportunities for local unemployed people
- developing skills, providing vocational training or lifelong learning opportunities for disadvantaged people in the community
- access to a better quality of life for disadvantaged members of the community
- focusing on some sort of environmental need
benefits of owning a business?
- Being your own boss — independence
- Possibility of making a profit
- Challenging, rewarding and satisfying
- Increasing personal wealth
- Contributing positively to society
- Developing own creative ideas
- Overcoming unemployment
- Achieving a better lifestyle
- Employing family members
- Possible tax advantages
limitations of owning a business?
-Hard work and long hours
-Meeting the demands of customers, suppliers and financiers
-Fluctuating or uncertain income
-Risk of failure
-Stress and worry
-High levels of responsibility
-Constantly solving problems
-Difficulty selling the business
what is an entrepreneur?
An entrepreneur refers to a person willing to establish a business whilst taking risks and seizing opportunities in the hope of making profit.
what is a manager?
A manager is the owner (or employee) who runs the business or aspects of the business operations day-to-day. A business manager may manage and direct staffing, marketing and operations (producing the goods and services sold).
what are Characteristics of Entrepreneurs?
- shared vision
- initiative
- innovation
what is a shared vision?
An ability to build understanding/hope of what what the business will be like in the future which provides clear direction. Everyone in the business will then work to achieve this.
what is initiative?
Willingness to take the first step without being prompted & make decisions independently but might seek advice before doing so
what is innovation?
Creative ideas and drive to add a new product to an existing product line or significantly improving an existing product or process. Finding new ways of doing things.
what are Characteristics of Managers?
-Self motivation and discipline to follow through on long-term projects
-Leadership qualities and interpersonal skills to manage staff, customers and suppliers
-Ability to calculate and minimise risk as well as financial planning skills
-Flexibility and adaptability (willingness to modify plans and learn new skills in response to new information)
-Logical thinking which allows the manager to develop short and long term plans
what is a business opportunity?
A business opportunity is a set of circumstances that can allow a business to succeed, grow or improve.
what are the key sources of business opportunities?
-innovation
-recognising and taking advantage of market -opportunities
-changing customer needs
-research and development
-technological development
-global markets
what is innovation?
either creating a new good, service or process, or significantly improving an existing one
why is innovation a source of business opportunity?
Customers can be attracted to your business by unique or innovative new products, services, marketing or selling points. Innovation involves change, improvement and/or transformation. Innovating provides an opportunity to attract new customers and expand the business
what is a market (industry)?
A market refers to the businesses and customers that trade and purchase particular products.
examples of markets?
-Cosmetics
-Gyms/personal training
-Electronics (e.g. Samsung, Apple, Sony)
-Entertainment Streaming (e.g. Netflix, Foxtel, Prime, Stan)
what is a market opportunity?
A market opportunity is when there is a customer demand for a good or service that competitors do not provide.
This is sometimes referred to as ‘gap in the market’.
what is technological development?
Technological development is the use of scientific advances to meet industrial or commercial objectives.
examples of technological development?
-computer aided design (CAD)
-computer aided manufacturing (CAM)
-smart devices
-automated assembly lines
-mechanised processes
-robotics
-AI
how has social media helped as a technological development?
social media and the internet allows for businesses to reach a bigger market (globally)
what has technological development improved?
improved productivity and reduced production costs
what is research and development?
Research and development is investigating products and processes to develop new and better ways of doing things.
what is involved in research and development?
-product design
-product development product testing
-evaluation and identifying areas for improvement
-product refinement
how is research and development linked with innovation?
R&D links closely with innovation as it is the first stage in that process and has all the same benefits for business.
what are the changing customer needs specific?
Busy:
-wants convenience
-wants 24/7 trade
-wants supportive home services such as cooking, cleaning and childcare
Technological changes:
-has access to information
-compares competitors
-shops online
-is able to give reviews and use social media
Expectations:
-has high expectations of corporate social responsibility to people and the environment
-has high expectations of excellence in product quality
-is health and safety conscious
what are changing customer needs broad?
- changing incomes
- changing tastes and fashions.
- changing prices of complementary and substitute goods and services
- changing population
- changing expectations about the market, including future prices and incomes
- changes in the number of potential customers
what are changing customer needs important to a business?
products/businesses need to change according to customer needs resulting in greater sales and profit
what are global markets?
Global markets refer to the ability of markets or industry to sell their products worldwide