Topic 5 - Exploring Self-Employment Flashcards
(22 cards)
What is meant by the term entrepreneur ?
A person who has taken a risk in order to carry out a business venture (usually this is to start up a business)
What is meant by the term ‘self-employent’ ?
Self-employment is working for yourself and being your own boss
What are characteristics of a successful entrepreneur ?
LEADERSHIP SKILLS
- Being prepared to be a hard worker and put in the hours and effort into turning an idea into a business
- Being motivated and determined to keep going despite setbacks and continue to drive forward
- Good communication skills with customers and employees
- Acting responsibly so people know they can be trusted and so maybe be willing to take a gamble and invest in the business
PLANNING SKILLS
- Thinking through ideas and looking at the rewards and risks of the idea
- Considering future problems and changes and preparing how they can be managed
- Commit time for planning
- researching as much as possible
ABILITY TO CONNECT IDEAS
- By being creative and coming up with innovative ideas to move the business forward
- By being prepared to try alternative solutions if an initial idea doesn’t work out
- Being flexible and able to learn from mistakes and try out lots of different solutions
- Being able to understand the outcomes of decisions and seeing the bigger picture
DECISON MAKING SKILLS
- Being able to make decisions alone and not need the input from others at all times
- Taking responsibility for the descisions they make whether the lead to success or not
- Knowing when they have made a bad decision and take action to fix it
- Be able to take criticism from others and learn and improve from it
What are some of the Leadership skills an entrepreneur that wishes to be successful should have ?
- Be responsible, they should act in a way so people know they can be trusted and possible want to invest in their business
- Be motivated and determined and continue to work hard and keep going despite setbacks
- Be prepared to be a hard worker and be willing to put in the time and effort to turn an idea into a business
- Have good communication skills with employees and customers
- Be confident and enthusiastic in the business to motivate others
What are some of the planning skills a sucessful entrepreneur should have ?
- Research as much as possible
- Think through ideas and look at both the rewards and the risks
- Be prepared for changes and prepare how to manage them
- Consider future problems or possible setbacks and think about how to manage or resolve them
What decision making abilities should an entrepreneur have to be successful ?
- They should be able to make decisions alone and not wait around for others opinions
- They should take responsibility for the decisions they make whether they lead to success or not
- They should know when they have made a bad decision and take action to fix it
- They should be able to take criticism from client/staff and use it to learn from and improve decisions in future
What 5 steps have to be researched and considered before setting up a bussiness
1) Market research - whether there is a need for a product or a service
2) Funding - what are the funding options
3) How the product can be provided
4) How the product or service can be promoted or marketed
5) How the product can be placed
Why is it important that an entrepreneur carries out market research ?
They need to know :
- if their product will sell so therefore need to know if there is a demand for their product or service that could lead to a business with a strong and large customer base
- What the customer needs - so that they know what service, quality and experiences customers expect to recieve and so that they can cater appropriately for their customers
- What the competition is - so that they are aware of the other products or services they are competing against, which will allow them to price their products competitively in order to gain market share and attract customers
What are the 2 types of research ?
Primary Research - this is when new information is gathered through the likes of questionnaires, focus groups and interviews. This means the information will be up-to-date, relevant and specific to the needs of the entrepreneur however this can be expensive, complicated and time consuming to gather.
Secondary research - this is information that is already available from internet searches, business databases, information from competitors and census data. This will be easy and inxpensive to access but may be outdated and no entirely suitable for specific purposes that the entrepreur needs
What are the funding options for an entrepreneur before setting up a business
- Personal savings
- Sale of an asset e.g. car or house
- overdraft
- bank loan
- investors
- government assistance
What type of production may an entrepreneur use if they have made sure that the product is in high demand and there are resources readily available to make the product ?
They can use mass production to produce the goods in large quantities and at low cost
What are the advantages of mass production ?
- More products are produced at a lower cost, they sell well and therefore higher profits are made
- Time is saved as employees do not have to move between tasks
- Money is saved as each employee is trained for only a specific task
- employees become skilled at one task and so work faster and more confidently
Why is marketing and promotion needed ?
Marketing is needed to ensure that there will be a continuing demand for the product or service
What does successful marketing require ?
PRODUCT - should be designed to meet the customers needs
PLACEMENT - deciding where to sell the product so it is accessible
PRICE - setting a price that will attract customers but also still make profit for the business
PROMOTION - informing potential customers of the service or product and persuading them to buy it e.g. advertising, social media
What is promotion in regards to a product or service ?
Promotion involves persuading potential customers to buy a product or service through the likes of :
- Advertising campaigns such as print media, social media and broadcast media.
- Sales promotions such as loyalty cards, vouchers, buy-one-get-one-free schemes and free products with purchases
- Sponsorships e.g. of a sports team where their logo may be displayed for potential customers to see or their product such as a drink may be promoted
What do businesses have to consider before deciding a price for their products ?
- The price has to appeal to customers and maximise profit
- Has to relate to what the product is
- Who is likely to buy it - is it children who maybe don’t have lots of money
- Where will it be sold e.g in a supermarket where adults with jobs come in or in a school with students
- How much it cost to produce the product so there is no loss in profit
- The price of competitors
- The image or status the business wants to have as a high price may lead people to think it is a high quality item and vice versa a low price may lead to people thinking its low quality or better value
What needs to be considered about the placement of a product ?
- What is the most appropriate place to sell the product is it in-store somewhere or online
- What is the best channel of distribution to use - the process by which a product reaches the customer
- What is the best method of transport so that it arrives on time and in good condition
What are the financial advantages/ opportunities of owning your own business ?
- You get the profits from the business
- You get the money to reinvest in whatever you want, such as other businesses
- You can make lots of money from owning a business and so you can afford a higher quality life
What are the non-financial advantages/opportunities of owning your own business ?
- You are in control, you make your own decisions and are your own boss. You don’t have to answer to a superior or ask for permition to do things
- You can work when you want and can therefore fit your work around family or lifestyle
- You will have the satisfaction of working on something you feel really passionately about
- Running a successful business will boost self-esteem and confidence
What are the financial disadvantages/risks of owning your own business ?
- You may lose the money that you have invested into the business if the business is unsuccessful or somethinng goes wrong
- You may have difficulty with cash flow (money coming in and out of the business) which affects your own personal finances
- Your business may be affected by a poor economic climate such as the cost of living crisis meaning theirs loss of profit
What are the non-fiancial disadvantages/risks/challengs of owning your own business ?
- You may not be an expert in all areas of running a business, eg you may be good at creative ideas but not money manegement
- You are the only person responsible for the business and the staff
- Running a business requires a lot of time and effort which can have an impact on other areas of your life such as family. You could end up with high stress levels and worry leading to poor mental health and poor work life balance
- You are responsible for carrying out market research so if it is wrong it is your problem
- High levels of competition or not enough demand for your business may lead to failure
What should an entrepreneur do in regards to planning to become a sucessful entrepreneur ?
- When planning they should think though their ideas weighing out the rewards and risks and evaluating whether it is a sensible idea
- Think about and consider possible problems they may run into in the future and prepare for how they could manage them
- Research as much as possible to ensure that all choices and plans made are informed
