1.5 Entrepreneurs & Leaders Flashcards
(25 cards)
Define Leadership
Leadership is about having a vision, sharing that vision with others and providing direction
Define Management
Management is the day-to-day organisation of the business, its resources and its staffing
4 type of Leadership styles
- Autocratic
- Lassez-faire
- Democratic
- Paternalistic
Define Autocratic leadership
Leadership has complete control over decision-making, with little or no input from others
Define Laissez-faire leadership
Leaders takes a hands-off approach and allows their team to manage their own work
Define Democratic leadership
Leader involves their team in the decision-making process
Define Paternalistic leadership
Leader takes on a parental role, making decisions in the best interest of their staff
Define Entrepreneur
An entrepreneur is a person who is willing and able to create a new business idea or invention and takes risks in pursuing success
Define Intrapreneurship
Intrapreneurship refers to the practice of promoting entrepreneurial thinking and behaviour within an existing business
Barriers to Entrepreneurship
- Entrepreneurial capacity
- Fear of failure/lack of confidence
- Lack of training/know-how
- Access to finance
Characteristics of an entrepreneur
- Creativity
- Hard-working
- Resilience
- Initiative
- Self confidence
- Risk-taker
Skills of an entrepreneur
- Communication
- Team-working
- Problem solving
- Organisation
- Information technology
Financial reasons to set up a business
Profit maximisation - People want to create a profitable business that generates substantial revenue and profit for themselves and their shareholders
Profit satisficing - Occurs when the entrepreneur is not solely focused on maximising profits but rather achieving a satisfactory level of profit
This is common among small businesses, where the owner may prioritise their work-life balance
Non-financial reasons why people set up businesses
Ethical stance
Social entrepreneurship
Independence
Home working
Business objectives
- Sales maximisation
- Market share
- Cost efficiency
- Employee welfare
- Customer satisfaction
- Social objectives
Define Sole trader
A business that has a single owner (although they may still hire employees)
Adv. of Sole trader
They are easy and inexpensive to set up
The owner has complete control over the business
All profits belong to the owner
Simple tax arrangements
Disadv. of Sole trader
The sole trader is responsible for any debts the business incurs
Limited access to finance and capital
Limited skill set of the single business owner
Adv. of Partnership
Easy to set up and inexpensive
Shared responsibilities and decision-making
More skills and knowledge are available
Increased access to finance and capital
Disadv. of Partnership
Partners have unlimited liability
Potential for disputes between partners
Profits are often shared equally, regardless of the contribution
Difficult to transfer ownership
Define Partnership
Two or more people join together to form a business
Define Private limited company
The ownership of the business is broken down into a specified number of shares
Adv. of Private Limited Company
Limited liability, meaning the owners are not personally responsible for the company’s debts
Access to greater finance and capital
Easier to transfer ownership
Can have a professional image and reputation
Disadv. of Private limited company
More expensive and time-consuming to set up
More complex legal requirements and regulations than sole traders
Annual financial reporting and auditing are required
Shareholders have little control over the company as the founder usually imposes their agenda
