1.5 entrepreneurs and leaders Flashcards
describe how business is set up and created
a business must set up a business plan and obtain finances either from a bank or a business angel .
Explain how a business can be developed and expanded.
First, the competition may be such that there is no room for growth within the current market. If a business does not find new markets for its products, it cannot increase sales or profits. A small company may also use a market expansion strategy if it finds new uses for its product.
identify the risks and barriers to developing your own business,
financial risk
competitiveness
no infrastructure to the business
Describe the characteristics and skills required to be an entrepreneur.
Listen. ... Creativity. ... Assertiveness and Confidence. ... Perseverance. ... Courage and Risk Taking. creative passionate motivated
Explain the financial and non-financial reasons that people set up a business
financial objectives - to survive to be able to have enough money to pay off the debt and arise
to have a sufficient source of finance
to make a profit
non-financial objectives - want to be self-employed, your own boss, on a flexible schedule, hobby
identify and describe several business objectives to include survival and profit maximisation.
survival profit maximisation sales maximisation market share employee welfare customer satisfaction social objectives cost efficiency
Describe the elements of the main forms of business ownership
sole trader - one person with limited liability
partnership - between two or more people mostly an unlimited liability
cooperative - owned by a group of individuals for mutual benefit.
limited liability - the stakeholders won’t suffer from any debt issues just lose the money invested
franchise - when a business owner franchisor sells there logo to a franchise which is a third world operation to thrive a business .
Define opportunity cost.
A benefit, profit, or value of something that must be given up to acquire or achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost.
describe the difficulties in changing from an entrepreneur to a leader
The transition from entrepreneur to leader involves a change of mindset. You need to make sure that you are always working “on” the business, while other employees are working “in” the business. Take some time to set both emotional and practical boundaries.
