a level business 1.5

Roles of an entrepreneur

• risk bearer - invests time and capital with no guaranteed return

• Decision maker - chooses pricing and marketing strategies

Sources of business ideas

• market research primary and secondary identifies consumer needs + wants in the market

• Analysing rivals helps identify weaknesses

Functions of Entrepreneur

• Planning and setting objectives → establishes short-term and long-term goals

• Organising resources → combines labour, capital, and enterprise efficiently

Barriers to success entrepreneurs

• Lack of finance → businesses may struggle to access loans or investment

• Poor market research → misjudging consumer demand

EV of business objectives

• conflicts between objectives e.g profit vs CSR

• objectives change overtime

Sole trader

Business owned by one person - unlimited liability

Partnerships

• Unlimited liabitlity

• Joint ownership of running a business

Private limited company

• A business owned by shareholders but not traded on the stock market

• Wider access to capital

• Limited liability

Public limited company

• A company who can raise capital by selling shares to the public

• Limited liability

Limited liability

Where the liability of the owners is detached from the company - shareholders can lose their investment but their personal belongings are safe

Unlimited liability

Where there is no distinction in law between the individual and the business

What is a Franchise?

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

Franchisee

the individual who pays to run a business using the brand name and system of a franchisor

Stock market floatation

Occurs when a company goes public and becomes a PLC - shares are offered on sale to the public.

What happens when share prices rise or fall

• managers may receive a bonus

• Company finds it easier to raise capital

• Fall: company may become vulnerable to a takeover

• Price fall gives an indication of poor performance