Enterprise And Entrepreneurs Flashcards
(24 cards)
What is an entrepreneur?
A person who sets up a business in the hope of making profit
What is an enterprise?
Willing to take risks. Willing to take new ventures. Spotting a business opportunity
What is a risk?
Doing something that has the potential to fail : a calculated risk, the probability of something failing
What is a reward?
The perk/reward of doing something - the return of the action
What skills does an entrepreneur need or have?
Leadership - they need to take charge of the business, make key decisions and inspire actions to follow their action plan
Risk taker - want to stay up to date in the market, take risks in order to have the chance of being successful
Communication- so they can communicate with staff to avoid lower productivity, increases profit
Confidence- shows they are a good leader, to both workers and customers
What are the rewards of being an entrepreneur?
- profit
- control
- recognition
- personal satisfaction
- resilience
Why would someone choose to become an entrepreneur?
- gap in the market
- ambition
- challenge and develop skills and gain more responsibility
- social responsibility (to help others)
What is a sole trader?
When one person owns and controls the business. A sole trader an have employees
What type of liability does a sole trader have?
Unlimited liability
What is unlimited liability?
Unlimited liability means the owner is responsible for the debts of the business, so the owner has to pay it of even out of their own money. Some debts may not be able to be paid due cost being to high or not making enough revenue etc.. but this provides a sense of risk for a sole trader
What type of tax does a sole trader pay?
Income tax, not a separate entity. Any profit made by a sole trader is their income, so they pay income tax
What are the advantages of a sole trader?
- have full control of the business, independence get to make all the decisions
- keep all the profit
- big responsibility
What are the disadvantages of a sole trader?
- unlimited liability
- no one to consult with
- limited capital to start up the business
What is a private limited company?
Incorporated business owned by share holders, shares are usually bought by family and friends. All share holders have to agree before shares are sold
What type of ownership does a private limited company have?
They business is a separate entity form it’s owners. The business becomes its own person. Therefore can be as many owners “shareholders” as the business wants
What type of liability does a Private limited company have?
It has limited liability, the owners are only responsible for what they invest
What type of taxes do a private limited company pay?
Corporation tax that is a tax on profits, where ever the head office is based the corporation tax is paid there
What are the advantages of a private limited company?
- limited liability, you couldn’t loose your own possessions
- raise more capital due to more people investing
- more ideas, knowledge, enterprise
What are the disadvantages of a private limited company?
- everyone has to agree before shares are sold so it can be time consuming
- may had to pay divid end, bonus to share holders
- complex accounting proceeders and complex to set up
What is a public limited company?
Is an incorporated business which sells theirs shares on the stock exchange. It’s what business grow into, no business starts out as a public limited company
What type of liability does a public limited company have?
Limited liability. Owners are not responsible for the debts of the business
What type of tax does a public limited company pay?
Cooperation tax
What are the advantages of a public limited company?
- easy to make share capital, to invest in better equipment, research and development and can pay higher wages
- a lot of media attention
What are the disadvantages of a public limited company?
- very hard to set up, have to follow the guidelines of the stock exchange and very expensive
- a lot of media attention, if the business does something bad it will be reported on immediately which can effect the reputation of the business
- all financial documents have to be mad available to the public. This means that competitors can use this information to gain a competitive advantage
