1.5

Question 1

what is an entrepreneur?

Answer 1

A person who is willing to take a risk in setting up and growing their own business.

Question 2

What are the functions of an entrepreneur?

Answer 2

Financial management- Raising capital, managing costs
Purchasing- Liaising with suppliers, deliveries, logistics
Administration- Insurance
Managing people- recruitment
Marketing- research and promotion
Production- production of goods and storage

Question 3

What is an intrapreneurship?

Answer 3

Employees within a business who has the freedom and opportunity to develop their ideas and se their creativity to innovate.

Question 4

How can entrepreneurs deal with risk and reduce uncertainty?

Answer 4

Carry out detailed research
Producing detailed plans
Analysing external influences
Developing contingency plans

Question 5

What are barriers to success?

Answer 5

Lack of finance
competition from large established businesses
Aversion to risk
Lack of ideas
Lack of Entrepreneurial skills
Responsibility of becoming an employer
Legal barriers

Question 6

What are characteristics of an entrepreneur

Answer 6

Self confidence
Self determination
Self starter
initiative
commitment

Question 7

What are skills of an entruprenur

Answer 7

Organisation
Financial management
Managing and communication
Negotiating

Question 8

What are the two motives for setting up a business

Answer 8

Financial motives
non-financial motives

Question 9

What are Financial motives

Answer 9

Profit maximisation- generating as much wealth as possible
Profit satisfying- to generate enough income to live a comfortable lifestyle

Question 10

What are non-financial motives

Answer 10

Ethical stance- Running a business to support ethical principles
Social enterprise-Running a business for a social/ environmental cause
Independence and home working- The control and flexibility of a business

Question 11

Why do businesses set objectives

Answer 11

Provide quantifiable steps to achieve aims
clarify direction of the business
measure success against targets
motivate employees to achieve
reward employees

Question 12

What are some influences on business objectives

Answer 12

Size
Sector
Market
Ownership
Owner

Question 13

What are some forms of business

Answer 13

Sole trader-self employed
Partnerships- owned by 2 or more individuals
Private limited company- Owned by shareholders separate legal entity
Public limited company- Large publicly owned companies
Social enterprises
Online businesses
Lifestyle businesses

Question 14

What is Franchising

Answer 14

A limited company that licenses the right for individuals or groups to set up an identical operation in a new region

Question 15

What are advantages and disadvantages of Franchisors

Answer 15

+effective way to grow the business
+Setup fee and royalty payments
-Risk of Franchisee damaging brand if not ran properly

Question 16

What are Ads and dvs of Franchisees

Answer 16

+recieve a business in a box
+Provided with training and support
-Expensive setup fees and little freedom to change the businesses format
-Royalty payments- Share of sales go back to the franchisor

Question 17

What are ads and dvs of LTDs

Answer 17

+Shareholders have limited liability
+Easier to raise capital through internal shareholders
+Owners may pay less tax if operating as a shareholder
-Harder to set up
-Accounts published and publicly available

Question 18

What are ads and dvs of PLCs

Answer 18

+huge amounts of money can be made through stock market flotation
+Finance easier to raise through issuing shares
-accounts openly available to the public
-External pressures

Question 19

What is a stock market flotation

Answer 19

The companies shares are offered on sale to the general public

Question 20

What are the steps for going public

Answer 20

Issue a prospectus
Reviewed by lawyers
A minimum of £50,000 share capital has to be provided upfront
If successful, a certificate of shares will be issued
The initial public offering goes live and the business can start trading on the stock market

Question 21

What happens when share prices rise

Answer 21

Managers may receive a bonus
the company finds it easier to raise capital
consumers with shares feel more confident to spend

Question 22

What happens when share prices fall

Answer 22

Vulnerable to takeover
Indication of poor performance
Finds it hard to raise capital
Feel less confident to spend

Question 23

What is opportunity cost

Answer 23

The benefit lost from the next best alternative

Question 24

What are trade offs

Answer 24

Often involve the loss or compromise of another option or factor

Question 25

What options do businesses weigh up?

Answer 25

Investment appraisal
Risk vs reward
Comparing ads and dvs
Balance short term gains with long term benefits
Gauging support
The probability of success

Question 26

The demands of becoming a leader

Answer 26

There will be increasing pressure for them to change their approach
and become an effective leader

Question 27

What are the difficulties of becoming a leader

Answer 27

Must accept responsibility
Need key qualities such as confidence
Sharing ownership an control of the business
Managing with stress

Question 28

How leaders overcome difficulties

Answer 28

Stress management
Education
Mentor
Delegate and trust