1.5 entrepreneurs and leaders Flashcards
Why do people set up a business?
- profit maximisation
- independence
- social entrepreneurship and giving back to the community
- flexibility
Characteristics of entrepreneurs
- determination
- passion
- resilience
- the ability to cope with risks and uncertainty
Common skill of entrepreneurs
- Understanding the market
- Financial skills
- Persuasive abilities
- problem solving
- networking - can rely on help when needed
what is a form of business
the legal status of the organisation
Main forms of business
Sole trader
partnership
Private limited companies (LTD)
public limited companies (PLC)
sole trader
a business run by a person without turning into a company. The person is personally liable for any debts built up in running the business
BEN - owner gets full control / keeps all profit
DIS - unlimited liability and harder to raise finance
Partnership
A business with several sole trader owners
AD - varied skill and experience / more capital raised / shared responsibility
DIS - unlimited liability / potential disagreements
LTD
no minimum share capital. Information is kept private from public and rivals
AD - limited liability
PLC
Sells shares via the stock market. Businesses must have a minimum of £50000 of share capital to become a plc
AD - limited liability
Define unlimited liability
that business owners must take personal responsibility for covering debts run up by their business
Define limited liability
A form of legal protection for business owners which ensures that owners of a limited company can only lose money they invested into the firm, not personal assets
Other forms of business
franchising
social enterprise
lifestyle business
online businesses
