Business Theme 1 Assesment

1.5, 1.5.4

What is an entrepreneur?

Someone who sets up a business and takes on financial risks in hopes of profit.

What are the roles of an entrepreneur?

Create/set up businesses, running/developing a business, innovation (intrapreneurship), overcome barriers and anticipate risks

What are some Entrepreneurial motives?

Financial motives include profit maximization and satisfying, non-financial motives include their ethical stance, independence and working from home.  

What are characteristics of an entrepreneur?

Opportunity spotter, risk-taker, driven, resilient, determined, self-motivated

What are barriers to entrepreneurship?

Entrepreneurial capacity, access to finance, lack of training, fear of failure/confidence

What are different types of business objectives?

Sales revenue, profit, return on investment, growth, market share, value of business, corporate image & reputation

What is an unincorporated business?

Owner has unlimited liability for business actions (including debts) as there’s no legal difference between them and the business. Most unincorporated businesses operate as sole traders or partnerships.

What is an incorporated business?

Where the company has a separate legal identity to its shareholders and have limited liability meaning they only loose what they invest into the business and there personal assets are protected. Most incorporated businesses operate as Private Limited Companies.

What are the Advantages of becoming a Public Limited Company?

An advantage is being able to list stocks on the public stock exchange, which opens up the business to lots of new investors to raise finance. They are also then protected by limited liability and being a PLC leads to greater exposure.

What are the Disadvantages of becoming a Public Limited Company?

By selling shares, they’re giving away portions of their business to shareholders, diluting its ownership and short-term shareholders may pressure the business to focus on short-term gain for dividends. This also includes more public scrutiny and higher costs and legal requirements - taking up time and resources.

What is a Social Enterprise?

Businesses with primarily social objectives whose profits are principally reinvested for that purpose in the business or community.

What is an Advantage of becoming a Franchise?

You gain access to a solid customer base and don’t have to establish your own brand/reputation. Additionally, buying into an established business reduces the risk of failure and the franchisor offers support/trading for the franchisee.

What is a Disadvantage of becoming a Franchise?

Investing in a franchise has high initial start-up costs. Franchisee’s must pay 30.3% of profits to the franchisor and have no control over how it runs: product range, prices etc.

What is a Lifestyle Business?

A business that's designed to allow the owner to live a lifestyle of their choosing. Tend to be quite small and may not have high potential for growth or major profits but offer the owner the flexibility and work-life balance they want while doing something they enjoy.