business theme 1 - 1.5.1

What is a entrepreneur

if an indivudal who creates , develops and manages a b idea

• urinal take financial , personal , professional risk in the hope of making a profit + pursuing success

• or could be to achieving other rewards ( independence )

Why do people set up a b

a small b just needs a good idea + entrepreneurs who wants to make it work

• independence

• Profit motive ( higher earnings )

• pursue of passion

what are the steps involved in setting up a traditional b

• Market Reaserch ( identify consumer needs / D )

• start small ( begin with low fixed cost of market stall )

• draw a b plan ( finial forecast / marketing )

• growth ( reinvest profits to expand → new p / market )

what are the steps in setting up a online only b

• remove need of needing a physical premise

• platform like ebay / asks marketplace allow entrepreneurs to sell through a 3rd part platform , this reduces step up cost

• alibaba provides supply chain link for raw materials

What does it mean if your starting as a sole trader

sole trader - is self employed person who owns + controls thier b

• must register with HSBC for tax purpose

how does brining unique entrepreneurship help business

• Bringing unique entrepreneurship spirit into b helps it to drive forward / expand

What are the daily operations of running day to day b

turn attention to daily operations

• managing finance ( cf )

• ordering / managing stock

• chasing payments from clients

Failure to do → cf problems , damage reputation , even b closure

what are the ways a b can expand

• Ospringe in another location to reach end consumer base

• diversification - entering new p line / market allows spread risk

• licensing p - allows others to produce / sell under your brand

What is a intrapreneurship

e within a larger organisation act like entrepreneurs , driving innovation from inside the b ( take risk / are creative / solve problems )

• allowing b to tap in creative potentials for e , generating new p/s that drive growth + competitive advantges . this creates a ownership culture , increases motivation , retains talent

What are the barriers to entry

1. Entrepreneurial capacity

2. Access to finance

3. Lack of training / knowhow

4. Fear of failure

5. lack of confidence

1) euntrapernurail capacity

Refers to the skills , creativity , risk taking ability needed to idnetify + exploit opportunities

• Many aspiring e lack the midst / skill set required to run b → poor DM , weak organisational skills

• Without these may fail to difrenciate their p / respond to market trend

• this can lead to missed opportunities ( comeptiores capture market first , inefficiencies operations ( waste resources )

2) access to finance

the availibity of funds to cover start up costs , working capital , investment in growth

• Bank see start up as high risk due to trading history ( limited access to loans ) . lack of collateral ( assets ) makes difficult secure loan

• have to rely on personal savings . limited ability to purchase stock , hire staff . growth is restricted as cant invest in expansion

3) lack of training

knowledge gaps In areas ( marketing , law , finance )

• lack formal b transition / experience . unable understand regulatory requirement ( tax compliance ) . without market Reaserch skills → misjudge D

• mismanagement of resources ( financial loss ) . weak marketing strategies (low sales ) . legal mistakes ( fines )

4 ) fear of failure

psychological barrie where e aviod risk due to uncertainty of outcome

• giving up secure salaried job . fear of reputation damage . High strategies up cost menaing failure has LT financial consequences .

• good ideas may never materialise . leads to risk aversion → only pursue safe ideas with little invocation

5) lack of confidence

the absence of self belief to lead a b venture

• may doubt ability to compete against established firms . underestimate skills + overestimate risk .

• delay in launching b . poor leadership → staff + investors lack trust . difficult in negotiation with suppliers

What are the 2 types of risk

finial risk + lack of security

what is risk

probability of an event happening that can negatively affect a b

what if financial risk

the danger of loosing money during to investment in B venture

• strategy is cost ( equipment ) , replying on boorwed’d capital ( bank loan ) . uncertainty of D

• if revenue lower than expected → struggle to repay debts . loss of personal savings . LT debt burden → bankruptcy

What does it mean by lack of job security

the loss of stable income / benefits when moving from employment to entrepreneurship

• give up fixes slavery + job protection when starting a b . reliance of fluctuating sales for income

• increase stress / uncertainty / diffuclt access loans without stable income proof . psychological strain → discourages

what is uncertainty + diffrent types

Situations where outcomes are unpredictable + can’t be easily measures / controlled

• Wetahwe , helath scare , comedy price shock , exchange rate

1) weather conditions

seasonal b ( torusim’m ) . basically weather reduces footfall ( lower revenue ) . extreme weather Ernst ( floods ) distrust supply chain

2) helath scars

outbreak ( COVID ) reduces consumer D in affected industries . increase cost due safety regulations , labour shortage if fall ill

3 )Commodity price shock

sudden change in price of essentail raw materials

• increase p cost , uncertainty in profitability as margin shrinks . B forced raise price → reduce comepttivenes .

4) exchange rate fluctuations

change in value of countires currency against others

• exporters benefit if currency weakens ( p cheaper abroad ) . imported cost raw materials rise . creates planning uncertainty for firms operating globally