1.2.1 Entrepreneurs Flashcards
Entrepreneur
A person who spots an opportunity and shows initiative and willingness to take risks and to benefit from the potential rewards.
E.g:
- Vince Mcman sold wwe for 9 billion
- Nvidia was founded by Jensen Huang in 1993
- Baron Pierre de Coubertin olympics 1896
Qualities of an entrepreneur:
- Risk takers
- Leadership skills
Creative destruction:
- ‘The process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one’
- When something new kills something old
- When a business innovates in order to produce new, cheaper or better products,with a wider market appeal, introducing strong competition.
Adding value:
Adding value:
- Ability to ensure that the value of the output is higher than the sum of the value of all the inputs
- Important an entrepreneur can add value in order to survive and make profit
Entrepreneurial Motives:
Fulfilling dream
Making money
In charge of own destiny
Be own boss
Work-life balance
To prove you can
Developing innovation
Providing a service
Supporting a community
Social responsibility
Necessity
etc
Financial Motives:
Profit maximisation
- To make as much profit as possible
- Profit = sales revenue - total costs
Profit satisficing
- To make enough profit to be satisfied but not be purely motivated by profit
- May profit satisfy to maintain a work life balance
Non-Financial Motives:
Ethical stance
- To behave in a manner deemed to be morally correct
- Provide a good or service that meets ethical beliefs e.g. cosmetics not tested on animals or clothes made from fair trade cotton
Social entrepreneurship
- Motivated by supporting a cause rather than making a profit
- Any surplus revenue earned is used to further support the cause e.g. support the community or fund research
Independence
- Be own boss and make own decisions
Homeworking
- Match family commitments to work commitments
- Work life balance
