ENTREPRENEURS AND LEADERS Flashcards
(87 cards)
1
Q
What are the 7 characteristics of an entrepreneur
A
- self confidence
- self started
- committment
- initiative (motivation)
- perseverance
- good judgement
- determination
2
Q
Who is an Entrepreneur
A
INNOVATORS -tries to make money out of very business idea
RISK TAKERS
OWNER OF FIRM
ORGANISER OF A FIRM
3
Q
What are the 2 motives of becoming an Entrepreneur
A
- Financial Motives
2. Non- Financial Motives
4
Q
- Financial motives
A
means theres an opportunity for higher pay than a normal job.
5
Q
What are the 2 possible approaches to profit the financial motives.
A
a) profit maximisation- achieved by hard work + risk taking
b) profit satification- enough profit to satisty the owners needs.
6
Q
- Non- financial motives (a,b,c,d,e)
A
a) independance
b) successfully creating a business
c) job satification
d) love the product/service being sold
e) homeworking
7
Q
what 8 Entreprenurial skills does an entrepreneur need
A
- professional skills
- organisation + forward-planning
- financial management
- communication
- managing people
- good decisions
- negotiating
- IT skills
8
Q
5 barriers to entrepreneurship
A
- fear of failure
- lack of skills or entrepreneur characteristics
- the idea of being an employer
- legal barriers
- finance
9
Q
how can risks in businesses be reduced
A
- market research (surveys)
- quantitative business techniques (decision trees)
10
Q
how can firms prepare for the uncertainty of something occuring
A
- business analysis (SWOT and PESTLE)
- contingency plans (school fire drill)
- emergancy funding put aside
11
Q
SWOT
A
strengths, weakness, opportunities, threats
12
Q
PESTLE
A
political, economic, social,tech,legal, environment
13
Q
What are Intrapreneurs
A
workers, within a firm, who use their ENTREPRENEURIAL SKILLS to find and delelop INIATIVES that will financially benefit the company.
14
Q
3 things that normally involve beinging an intrapreneur
A
- product development
- no finanicial risks to the workers
- important for growth in the tech firms e.g google
15
Q
advantages of intrapreneurs
A
- more competitve edge to business
- winning awards=good company image
- workers get job satification
16
Q
definition for opportunity cost
A
the benefit from the NEXT BEST ALTERNATIVE that has been given up
17
Q
when entrepreneurs set up a business what do the need to think carfully about?
A
the opportunity cost (e.g the sacrifice)
18
Q
definition of TRADE-OFF
A
when a business decision maker faces a compromise between 2 ALTERNATIVES
19
Q
advangtages of working by yourself
A
- higher percentage of pay
- more likely to have flexiable hours
20
Q
advangtages of working for a firm
A
- less responsiblity
- no fear of bankruptcy
- regular salary
21
Q
The higher the risk the higher the
A
PROFIT
22
Q
name the 2 UNINCORPORATED types businesses with UNLIMITED LIABILITY
A
- sole traders
2. partnership
23
Q
definition of SOLE TRADER
A
an idividual who owns and operates his/her own business although he/she many also employ workers
24
Q
examples of sole traders
A
farmers, hairdressers and small internet retailers
25
advantages of a sole trader
- cheap to set up
- owner keeps all the profit
- completely confidential
- can respond to change in competive environment very quickly
26
disavantages of a sole trader
- unlimited liability + bankrupcy = could loose all possessions
- limited source to finance
- long working hours
- no income on illness/holiday
- income tax and national insurance contributions will need to be paid
27
definition of a partnership
A business organisation that is usally owners by 2-20 people
28
examples of a partnership
accountants, vets, estate agents and solicitors
29
advantages of a parternship
- short working hours
- more skills
- greater amount of capital
- responsibility is shared
- confidential information don't need to be published
30
disavantages of a parternship
- profit must be shared
- loss of control
- unlimited limability will rely on you and your partners
31
LLP- limited liabiltity partnership
when in a partnered business one person has unlimited liability but the rest of your partners have limited liability
32
inorder to be a incorporation type of business you must complete 2 documents
1. the memorandum of association = name and purpose
| 2. the articles of association = internal runnings
33
where must firms register
'Registrar of Companies' at Companies House
34
name the 2 INCORPORATED types companies with LIMITED LIABILITY
1. Private limited companies
| 2. Public limited companies
35
characteristic of a private limited company
- can be listed for stock exchange
- shares only sold to FRIEND/FAMILY
- name must be followed by the letters Ltd
- benefits from limities liability
36
advantages of Ltd
- better public image
- limited liability for owners
- fiance can be gained by selling shares.
37
disadvantage of Ltd
- profit is spilt between shareholders
| - need to public accounts
38
how can a Ltd become a Public limited company
if it has more than £50,000 from share capital
39
characteristics of a Public Limited Company
- shares can be brought by anyone (company can be registered on the stock market)
- company name will be followed my Plc
- has limited liabilitly
40
advantages of a Plc
- huge amounts of money by selling shares
- easier to raise finance
- good for company image
41
disadvantage of a Plc
- expensive to set up (sometimes millions)
- expensive to run (due to more publishing than Ltd)
- huge amounts of regulations
42
what is AGM
Annual General Meeting, this a meeting where all shareholders come together and nominate a board of director and then the director will run the business daily
43
How many Not-for-profit Organisation businesses are there
around 400,000
44
characteristics of a Not-for-profit organisation
- not government organisations
- financial gain is not an objective
- profit (called 'surpluses') are reinvested into the organisation
- volunteer staff and paid employees
45
definition of social entreprise
businesses that are driven by values and have social, environmental, community, welfare or cultural aims and objectives.
46
3 types of social entreprise
1. cooperative= customer owned (coop)
2. mutual businesses=profits returned with cheaper and better products
3. charites=rely on donations for survival
47
what is a lifestyle business
when the aim is to provide sufficient income and flexiblility to support a certain life style
48
examples of a lifestlye business
- bed&breakfast
| - teaching music while playing in a band
49
definition of a franchises
a busines based upon the name, logo, and trading method of an existing successful business
50
what percentage of franchises fail within 3 years
30%
51
whats the UK franchising industry turnover
£17.1 billion (2018)
52
how many people are averagerly hired as employers
700,000 (325,000 full time)
53
examples of franchises
subway, KFC, specsaver, pizza hut
54
5 bulletpoints describing how franchising work
- the franchisor grants licence to buyer (franchisee)
- franchisee pays intial fee and monthly amount
- shop designed according to franchisor
- suplies come from franchisor
- franchisor offers marketing and support
55
5 bulletpoints describing why franchising is successfull
- trading method has been used and tried before
- customers recognise loyalty
- advertisting by the franchisor = low cost
- usally has exclusive rights to sell in the local area
- easier to finance as it is a proven business model.
56
Potential problems for a franchise
- highcosts
| - other franchises my give a bad reputation for the whole business.
57
advantages of being a franchisor
- fast method of growth
- cheap growth= risk and paid by the frnachisee
- the franchisees are more motivated than normal workers
58
disadvantages of being a franchisor
- shared profit
- franchisees could form a bad reputation
- cost of advertisment can be high
59
advantages of being a franchisee
- business supported by franchisor
- lower risk as everything has been tested already
- marketing businesses are bigger than they could afford due to the franchisor
60
disadvantage of being a franchisee
- profit is shared
- lack of inderpendance
- must follow strict opperating rules
- expenisive to initially set up
61
definition of aim
An aim expressese the long term intention of a business to develop in certain manner
62
definition of objective
a goal or target that must be achieved in order to fulfil the buisness aims
63
definition of mission statement
sets out what the firm is looking to achieve and hence its reason for extence
64
S,M,A,R,T
```
S- specific
M- measurable
A- attainable
R- realistic
T- timebound
```
65
objectives compared to aims
objectives are actions that are taken to complete aims. objectives are short term goals
66
common business objectives (8)
- survival
- profit maximisation
- sales maximisation
- increasing market shares
- cost minimisation
- employees welfare
- customer satisfaction
- social objective
67
survival =
- new firm entering market
- ecomomic charge
- new competition
- expansion to quick
68
profit maximisation =
- keeping costs as low as pos
| - price skimming
69
sale maximisation =
- occurs when its a new product to the market
- or when profit is made from complementary products
- e.g game consoles
70
increasing market share =
a larger market share raises company profiles and increase revenue (income)
71
cost minimisation =
- economic downturn
- profits are down
- e.g Aldi = wonky fruit
72
employee welfare =
- happy workers= motivation, cooprative, productive
- better working environment
- good working hours
73
customer satisfaction =
never a primary objective
- encourages loyality and repeat business
- dealing with complaints
- comunication skills
- social media platform
74
social objectives =
acting positively to local comunity = e,g Amazon bad example
- visting local schools
- charity donations
- reasonable opening hours, noise, emplyoment levels
75
definition of a leader =
a person who decides the direction of a company and inspires the workforce to achieve the agreed goal
76
give an example of someone who has successfully moved from being an entrepreneur to a leader
Facebook - Mark zuckerberg
77
why would you need to become a leader
because if the business becomes very successful they would need to expand the amount of workers and therefor you would become there leader.
78
entrepreneur ---> leader = owership
- working with partners so your not completely responsible
| - switching to private limited company Ltd
79
entrepreneur ---> leader = a switch in formality
```
-thinking about...
>legal contracts
>health & safty
>insurance
>public liability insurance
```
80
entrepreneur ---> leader = motivation and inspiration
>thinking about workers
>adding bonas???
>finacal incentives
81
entrepreneur ---> leader = new role
>becomig a leader/manager
| >being inolved in the day to day business
82
what 4 points makes it difficult going from an entrepreneur to a leader
1. pressure
2. lack of leadership skills/characteristics
3. adapting to the new role
4. sharing the ownership and control
83
1.pressure
- non payment by debtors
- unable to pay creditors
- conflict within workforce
84
2.lack of leadership quaities
- lack of communication
- problem solving
- decision making
- organisation
85
3.adapting to new role
- will have to delagate new roles to workers= responsibiliy
- developing the neccassary skills
- focusing on business stategies
86
4.sharing owernship and control
- reflects on income
| - can undermine the leader
87
how to meet the demands of leadership
- earning respect
- maturity and experiance
- education
- stress- reducing techniques
- delagation and trust
