1.5.2 Entrepreneurial motives and characteristics Flashcards
(14 cards)
why do people set up a business
financial motives and non financial motives
give examples of financial motives
profit maximisation
profit satisficing
financial security
give examples of non financial motives
ethical stance
social entrepreneurship
independance
home working
define enterprise
the skills and abilities to take risks and create profits
the creation of a business to meet needs and wants of customers
define entrepreneur
a person who organises, operates, and assumes the risk for a business venture
a person who takes the risk of starting a new business
characteristics of a successful entrepeneur
passionate and visionary
energetic, driven and resilient
self-starting and decisive
calculated risk taker
focussed
results orientated
what is profit maximisation
desire to earn substantial rewards is a strong entrepreneurial motivation
what is profit satisficing
a sufficient profit to enable a satisfactory standard of living
here the entrepreneur will take fewer risks
the trade off is lower returns
associated with ‘life style’ business
give some non financial motives for starting a business
- need for control over working life
- need for flexible working
- frustration with unfulfilled potential
- escape an uninteresting job
- pursue an interest or hobby
- want to be the boss
- satisfaction from building something
- wants rewards from efforts
- dislike bureaucracy of hierarchy
- change in personal circumstances
what is social enterprise
the trade of goods and services for a social purpose
what is the triple bottom line (TBL)
financial
social
environmental
reflects a broader understanding that long term business success is intertwined with the well-being of society and the environment
downsides/barriers of being an entrepreneur
- occasional loneliness and isolation
- cant blame others when things go wrong
- financial pressure
- hardwork
- strain on family and social life
- higher stress levels
- needs to multi-tasking
- roller coaster of emotions
benefits of having an ethical stance
- attracts good publicity
- encourages higher sales, even if prices are high
- with high profits it can support the costs of being ethical
drawbacks of having an ethical stance
- increased costs to cover sustainable materials, fair labour and to be compliant with regulations
