Studied by 8 people
Entrepreneur
Person who organizes, operates and takes the risk for a new business venture
Benefits of an entrepreneur
Independance - able to choose how to use time and money
Able to put own ideas into practice
May be profitable and the income might be higher than working as an employee for another business.
Able to make use of personal interests and skill
Risk
Many new entrepreneurs businesses fail
Capital
Entrepreneurs have to put their own money in the business ad find other sources of capital
Lack of knowledge and expertise
In starting and operating a business
Opportunity cost
Lost in income from not being an employee of another country.
Characteristics of a sucessful entrepreneurs
Hard working
Risk taker
Creative
Optimistic
Self confident
Innovative
Independant
Effective communication
What entrepreneurs must consider
What products or services are intended to provide and target customers
Main costs and enough products be sold to pay for them?
Where will the firm be located
What machinery?
Business plan
Document containing the businesses objective and important details about the operations, firm and owners of new businesses
Content of a business plan?
Decription - overview and objective
Products and services
The target market
What to include
Total market size
Predicted market growth
Target market
Analysis of competitors
Forecast sales revenue from the product
Business location and howw the products will reach customers
Physical location if applicable/ internet
How firm delivers\
Organization structure and manageent
Financial requirements
future
capital
cost
working capital
projections and profitibility
Challenges for starting a business
Lack of finance
Unestablished customer base
Cash flow problems
Marketing
People management
Production
Legalities
High production cost
Opportunities for starting business
Growth
Earnings
Transference and inheritance
Challebge
Autonomy
Security
Hobbies
Why do governments support start ups?
Reduce unemploymet
Increase competitions
Increase output
Benefit society
Growth
How do they support?
Training entrepreneurs (advice and support)
Loans w low interest rates
Grants → Train → Productive
Market research facilities
Why is it useful to compare size of businesses
Investors
Government
Competitors
Workers
Banks
How to measure?
Number of people employed
Value of output
Value of sales
Value of capital employed
Why owners want to expand?
Higher profit
Market power
lower avarage cost
Why some remain small?
Type of industry
Market size
Owners objective
Causes of business failure
Lack of management skills
Changes in the business enviorment
Poor finance
Overexpansion
