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Business Theme 1 Marketing and people > 1.5 Role Of Enrepreneurs > Flashcards

1.5 Role Of Enrepreneurs Flashcards

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1
Q

Benefits of businesses to society

A

-Creates employment & develops human capital
-Drive innovation through new/existing products
-Create wealth by providing returns on investments

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2
Q

Define enterprise

A

The skills and abilities to take risks and create profits and meet the needs ad wants of customers

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3
Q

Define Entrepreneur

A

A person who organises, operates and assumes the risk for a business venture

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4
Q

Define Start-up

A

a new business enterprise formed by one or more entrepreneur

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5
Q

What are the roles of entrepreneurs?

A

-Spot business opportunities
-Take calculated risks
-Acts as a catalyst for the creation & growth of new business enterprises

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6
Q

Popular sources of business ideas

A

-Business experience
-Personal experience
-observations

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7
Q

Describe an unincorporated business

A

-Owner is the business - no legal difference
-Owner has unlimited liability for business actions
-Most operate as a sole trader

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8
Q

Describe an incorporated business

A

-Legal difference between company and the owners
-Owners have limited liability
-Most operate as private limited companies

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9
Q

Define unlimited liability

A

Business owner is personally responsible for debts of business

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10
Q

Describe a sole trader

A

-An individual owning the business on his/her own
-Can employ people
-Owns all business assets and personally responsible for any debt (limited liability)

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11
Q

Advantages of a sole trader

A

-Quick & easy to set up
-Simple to run
-Minimal paperwork
-Easy to close /shut down

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12
Q

Disadvantages of operating as a sole trader

A

-Full personal liability
-Harder to raise finance
-Business is the owner
-Pay high tax rate

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13
Q

Describe partnerships

A

-Business started and owned by one or more people
-Partners own all business assets and owe all liabilities
-Legal apartnership agreements sets out how partnership is run
-Unlimited liability

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14
Q

Advantages of operating as a partnership

A

-Quite simple
-Minimal paperwork
-Expertise from both owners
-Greater potential to raise finance

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15
Q

Disadvantages of operating as a partnership

A

-Full personal liability
-Complicated to sell/ close
-Conflict between partners
-Poor decisions impact both partners

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16
Q

Importance of limited liability

A

-Important protection for shareholders in a company
-Shareholders can lose the value of their investment
-Limited liability doesn’t protect against fraudulent activity

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17
Q

Advantages of incorporated business

A

-Limited lability , protects shareholders
-Easier to raise finance though shares
-stable form of structure

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18
Q

Disadvantages of incorporated business (LTD)

A

-Greater admin cost
-Public disclosure of company’s information
-Directors legal duties

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19
Q

Describe public limited companies

A

-More specialist type of limited company
-Shares may be quoted / traded on stock market
-Subject to greater regulation in terms of public disclosure

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20
Q

Public sector organisations

A

-Provide services, funded by governments e.g NHS

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21
Q

Public sector companies

A

Business owned and controlled by the government e.g Network rail

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22
Q

Define Not-for-profit organisations

A

-Trade to benefit community, social aims as well as trying to make money e.g sports clubs

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23
Q

Define lifestyle businesses

A

-Used to describe a business that generates a “living” for the owners
-Business objectives less important

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24
Q

Define franchising

A

Franchisor grants a license to another business to allow it to trade using the brand / business format

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25
Advantages of opening as a franchise
-Still own your own business -Advice, support and training -Easier to raise finance -Buying power of franchisor -Lower risk / failure
26
Disadvantages for running as a franchisee
-Initial fees , expensive -Restrictions on actions -Problems selling the business on
27
Advantages for franchisor
-Classic growth strategy -Enables rapid geographical growth
28
Define opportunity cost
Measures the cost of a choice made in terms of the next best alternative forgone or sacrificed
29
Define Trade off
arises when having more of one thing potentially results in having less of another
30
Define Intrapreneeurship
Intrepreneurship involves people within a business creating or discovering new business opportunities, which leads to the creation f new parts of the business or even a new business
31
Ways to encourage intrapreeneurship in business
-Give employees ownership of projects -Risk taking and failure acceptable -Train employees in innovation -Reward entrepreneurial thinking and activity
32
Characteristics of a successful entrepreneur
-Passsion & Visionary -Energetic, driven and resilient -Self-starting and decisive -Calculated risk-taker
33
How do successful entrepreneurs deal with risks?
-Take calculated risks rather than gamble -spread risk by diversifying -Persistence
34
What are the two financial motives for starting a business?
Profit maximisation & Profit satisficing
35
Describe Profit maximisation
Desire to ear a substantial reward -Long term profit -Need to accept losses
36
Describe Profit satisficing
Making a sufficient profit to enable a satisfactory standard of living, associated with ‘lifestyle’ businesses
37
Non-financial motives for starting a business
-More control over working life -Need for flexible working -Want rewards from effort -Pursue an interest or hobby
38
Describe a Social Enterprise
-Trade in goods or services for social purpose -The triple bottom line: financial, social and environmental -Surplus goes towards one or more social aims
39
Barriers to being an entrepreneur
-Occasional loneliness and isolation -Can’t blame others when things go wrong -Hard work -Strain on family and social life
40
What are business objectives
-The specific intended outcomes of business strategy -End results -Targets in order to achieve its primary aims
41
Main functions of objectives
-A clear statement of what needs to be achieved -A focus for all activity -Targets for individual and group achievement -A means of measuring performance
42
How objectives can be used
-Provide clear focus for decision making -Provide a target -Motivate employees -Reduce uncertainty
43
What are SMART objectives
Specific Measurable Achievable Relevant Time Bound
44
Strategic objectives
-Focused on long tern -Set by the board -Involve higher risk & uncertainty -Stretching & challenging
45
Tactical objectives
-Focused on short term -Set by line management -Limited resources invested -Realistic & achievable
46
Describe business survival
-Priority for new businesses -Large proportion of start up fail in first few years -Survival also common objective for: loss-making businesses, businesses hot by competitive pressures
47
What are objectives relating to revenues
Revenue growth Sales maximisation Market share
48
Define cost efficiency
Cost efficiency aims to achieve the most cost-effective way of delivering goods and services to the required level of quality
49
Key benefits of cost efficiency
-Lower unit costs -Higher gross profit margins -Higher operating profits -Improved cash flow
50
What are profit objectives
-Specific level of profit -Rate of profitability -Profit maximisation -Make profit margins
51
What are employee welfare objectives
Staff retention Quality of customer service
52
Moving from entrepreneur to leader
-Some entrepreneurs characteristics are not always suitable for leading a bigger business -Delegation is much more important -Organisational design -Many entrepreneurs become ineffective “bosses”
53
Define business objectives
Statements of specific outcomes that are due to be achieved
54
Business objectives are…
-The intended outcomes of business strategy -Targets which the business adopts to achieve its aims
55
Main functions of business objectives
-Clear statement of what’s to be achieved -Focus for all activity -Targets for individual and group achievement -A means of measuring performance
56
How can business objectives be used?
-Implement the mission -Provide a clearer focus of decision making -Provide a target -Motivate employees
57
Define mission
A qualitative statement of the businesses aims
58
Define Aim
A long term plan from which business objectives are derived
59
Define objective
A target which must be achieved in order to realise the aim
60
What are corporate objectives
Objectives that relate to the business as a whole
61
Purposes of corporate objectives
-Provides strategic focus -Measures performance as a whole -Informs decision making
62
Define Functional objectives
Set for each key business function and are designed to ensure that the corporate objectives are achieved
63
Factors influencing business objectives
-Age of the business -Size & legal status -Ownership -Legislation
64
What is the survival objective
-Priority for new businesses -Established but loss making business -Firms struggling to handle a shock in the external environment
65
What does cost effienciency aim to achieve
Aims to achieve the most cost-effective way of delivering goods and services to the required level of quality
66
What are strategic objectives
Focused on long term, set by the board, involve higher risk, difficult to change in the short term
67
What are tactical objectives
Focused on short term, set by line management, low risk, realistic and achievable
68
What are the revenue objectives
Revenue growth, sales maximisation and market share
69
Key benefits of cost efficiency
Lower unit cost, higher gross profit margin, higher operating profits, improved cash flow
70
What are the profit objectives
Profit maximisation, rate of profitability, exceeding profit margins
71
What are employee welfare objectives
-Tend to be functional in nature -Staff retention -Quality of customer service
72
Customer satisfaction objectives
Usually what successfulI businesses strive for

Business Theme 1 Marketing and people (5 decks)

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