Outcome 1-investigating the concept of entrepreneurship Flashcards
(27 cards)
What is an entrepreneur?
An entrepreneur is someone who starts a business
What is an entrepreneurship?
Entrepreneurship is the process of taking an idea for a business, taking on the risk, and implementing plans to make this idea a reality.
What are the reasons for starting a business?
Desire for independence (personal and financial)
Being a business owner means being in control and assuming responsibility for all decision making. Potential for flexible working hours and conditions.
A self-employed person has freedom to innovate and problem solve without needing to ask a ‘boss’ for permission. Many people find it frustrating to work in environments that do not have this freedom or allow personal independence
To make a profit, the potential for wealth
Financial independence – Monetary Reward!
If you work for someone else, your boss chooses how much you earn. But if you own your own business, you have the opportunity to make money for yourself.
Not reliant on someone else to pay you
Even the most successful business may lose money in their early start up phase.
Business ownership is often viewed as a path to wealth
Business grows = increased profits = increased earnings
To fill an identified gap in a market
Identified a gap in the market
Recognised a market need
Being motivated to “fill a gap in the market” means wanting to do that enough that you actually start a business
To fulfil a social need
For many people the motivation behind starting a business is to give back to provide a service to benefit society
Social enterprises still aim to create profits, though unlike other business models these profits are distributed to social causes, not shareholders/owners.
what is a business manger and how is it different to an entrepreneur.
Business Entrepreneur: A person who is willing to seize opportunities to start and operate a business, and is prepared to take risks in the hop of making a profit.
Business Manager: A person who has responsibility for overseeing the operations of a business to ensure that it successfully achieves its goals.
All entrepreneurs are business managers
Not all business managers are necessarily entrepreneurs
What are the key characteristics of an entrepreneurs?
Seize opportunity to start and operate a business
Take risks in the hope of making a profit (calculated risk takers who do their homework and who are constantly looking for advice and mentors, are usually more successful).
Courage, confidence, determination, energy
Financial management skills
Time management skills
Interpersonal skills
Initiative: ability to take the first step in a process, without being prompted
Innovation and enterprise: Innovative thinkers: able to come up with new ideas, then develop and improve them. This requires creativity and inquisitiveness.
Vision: The ability to spot an opportunity and imagine something that others have not (what it could be in the future)
Confidence: a self-assurance that they have something the market needs/wants to buy + the confidence that they can provide it
Resilience
For success, a business operator must be prepared to persist and persevere over the long term
Patience and determination to see things through
Establishment of a successful business may require years of hard work. Success rarely happens overnight
Willingness to accept responsibility
What are business opportunities?
A business opportunity exists where an individual could provide a product or service that others would be prepared to pay for
Definition: a set of circumstances that presents itself as an avenue for success.
In business management, we also refer to this as a gap in the market
This means that there is a product or service that, if it was offered to people, those people would buy it
Those people would then be called customers
Potential customers = the market
Innovation
Recognising and taking advantage of market opportunities
Changing customer needs
Research and development
Technological development
Global markets
What is innovation?
Innovation is either creating a new good, service or process, or significantly improving an existing one.
Having something brand new to sell means that you can enter a market that had no existing competition. Uber, digital coins, Generative AI
what are changing Customer Needs?
Changing incomes
Changing tastes and trends
Changing population
What is research and development?
Research and development (R&D) is a set of activities undertaken to improve existing products, create new products and improve production processes.
R&D might result in the development of new products in response to the actions of competitors, improvements in existing products, or other technological developments
What are technoloigcal developments?
Technological development: applications of knowledge that have changed people’s lives and changed the way in which business operates.
New communication technologies allow idea and information to be transmitted rapidly to an ever-increasing number of people without geographical limitations, making it easier for customers to learn about products overseas.
Existing and impactful technological developments include TV and radio broadcasts, internet, WIFI, EFTPOS, streaming
Emerging technologies might include autonomous driving, virtual reality, artificial intelligences
What are global markets?
Different groups of potential customers may be separated by oceans or political land borders. These are known as global markets.
Diversifying your products to take advantage of global markets come with some advantages:
Opportunity to grow and expand your business
Reduced dependence on local markets
Extended life cycle of new and existing products through the discovery of new markets to sell them in
Reduce the effects of fluctuations in markets caused by changes in season or demand
What are business goals?
Business goals: statements that set out where an entrepreneur sees themselves in the future
When planning the future of a business, a list of potential and desired achievements or aspirations should be generated.
Objectives of the business
Important that all people involved are aware of business goals so everyone is working towards the same purpose.
A successful business owner has a destination in mind for their business
Business goal: what a business expects to accomplish over a set period
Without a goal, a business has no clearly defined purpose and nothing to work towards.
Goals provide a business with direction and help to measure results
Helps to keep a business on coarse to achieving the kind of success it desires.
what is a smart goal.
A simple and proven method of goal setting
Specific, Measurable, Attainable, Relevant, Timebound
For example: “to obtain 500 new customers in the market before the end of financial year by delivering good service and using internet-based marketing”
Vision statement/mission statement: a vision of where a business wants to be in the futures. Outlines how the business will achieve this vision
What is a business concept?
A business concept is a fleshed-out idea for a business, including more specific information such as:
The product
The target market
Staffing needs
Branding
Proposed competitive advantage
What is a business idea?
A business idea is the basic idea that you have for a business
- The initial idea or business concept may have come from a variety of sources, such as recognising changing customer needs, a development in technology, or expanding globally (see sources of business opportunities)
What is the process of a business concept being made?
The source of business concepts may come from a person’s own experiences, interests, abilities or imagination. Inspiration for ideas can be generated by:
Listening to people, particularly for ideas on goods and services people want, but that may not be readily available
Reading magazines and books and researching on the internet
Visiting displays and exhibitions in areas such as new technology or new products from overseas
Accessing government statistics and research information
Identifying a ‘gap in the market’ – a demand not currently being satisfied
Determining improvements that could be made to an existing product
what is the relationship between business opportunities concept development?
Business concept development begins with the identification of a business opportunity
The business concept is the plan for how to take advantage of that opportunity
Overall, the relationship between business opportunities and business concept development is that business opportunities provide the power for the development of a business concept, which is then used to turn the opportunity into a viable business plan.
what is market research?
Market research is an investigation into consumer needs and preferences, with regards to marketing goods and services.
e.g. Telephone, mail or email surveys
Informal face-to-face or written customer feedback
Interviews
Questionnaires
Focus groups
Sales figures
Government statistics
What is the importance of market research?
Overall, market research and initial feasibility studies can provide valuable insights and help a business owner make an informed decision about whether to move forward with a new venture
What is a feasibility study?
A feasibility study is an assessment of the business idea’s potential for success
Demand
Potential customers
Potential competitors
Competitive advantage
A consideration of the operations (internal factors)
Space
Equipment
Materials
Staff and support personnel
what is the purpose of an initial feasibility study?
The prospective business owner should carry out some initial market research to determine the viability of their business concept
A feasibility study is an assessment of the business idea’s potential for success. This involves determining how practical the idea is and whether it would successfully translate to the market
Overall, market research and initial feasibility studies can provide valuable insights and help a business owner make an informed decision about whether to move forward with a new venture
economic advantages and disadvantages that businesses provide?
Businesses offer significant economic advantages, including Employment and taxation revenue
Economic growth
Export earnings
. However, they also present disadvantages, such as
potential for
market domination, environmental damage,
income inequality.
How do businesses impact the social wellbeing of a nation?
Social wellbeing refers to how well a nation’s people live. It can be determined in non-economic measures (level of happiness, self-fulfilment, crime & death rates, environment quality)
How does business contribute to Australia’s social wellbeing:
Career
Employment provides people with:
Sense of purpose
Sense of belonging
Contribution to society
Opportunity to build self-esteem
Personal happiness and achievement
Opportunities to network/connect with others
Innovation
Invention and innovation has changed the way we live and improved our wellbeing.
Corporate Social Responsibility [CSR]
CSR: Managing a business in such a way that the broader social welfare of the community, including its employees, customers, suppliers and the environment, is taken into consideration when making business decisions.
CSR is good for social wellbeing because it means that a businesses customers are treated fairly and that the environment is not damaged.
Employees will want to work for a company that is socially responsible and that aligns with their values
What is the impact of government investment for R and D on a business?
R&D is expensive and not necessarily within reach of all businesses
Federal and state governments support business to conduct R&D via:
direct funding
grants
tax incentives
, government investment in R&D significantly benefits businesses by reducing innovation risks, fostering economic growth, supporting SMEs, encouraging public-private collaborations, and enabling long-term technological advancements.
