Entrepreneurs and leaders

define entrepreneurs

individuals who set up and run a business and take risks associated with this

4 key aspects entrepreneurs are responsible for in a business

-innovation

-organisation

-decision making

-risk taking

describe role of innovation

making money out of a business idea from gaps in the marker, new invention or market research

describe role of organisation

buying/hiring resources used to make or deliver products

describe role of decision making

making decisions on how to raise finance, product design, choice of production method, prices, recruitment and wages

describe role of risk taking

risk losing any money they put into the business if it fails- however if it is a success they will be rewarded

define opportunity cost

the benefit which is given up when the next best alternative is chosen

describe rewards for entrepreneurs

financial reward, doing something different, flexibility, challenge, independence

describe risks for entrepreneurs

debt to be paid off, difficulty of getting back into a job, reputational damage, personal impacts

how to would be entrepreneurs find a business idea through businesses experience

an idea comes from an existing job- risk free way to set up business due to existing knowledge of a market

how to would be entrepreneurs find a business idea through personal experience

interests of hobbies to start a new business (cyclist starting a bike shop)

how to would be entrepreneurs find a business idea through skills

-use broad skills (such as good people skills)

-or become trained in a new skill (plumber training as an electrician)

how to would be entrepreneurs find a business idea through lifestyle choices

some people want a lifestyle change and start a business to allow them to do so (pub or Air B&B)

what happens after entrepreneurs navigate initial difficulties in starting a business

-less likely to be involved in production of goods/service

-spend more time addressing finance, administration and marketing issues

-organising business into departments and hiring specialists

-take on leader role and oversee organisation

describe role of financial management

requires producing cash flow forecasts, arranging loans and overdrafts, making payments, chasing debts and monitoring cash movements into and out of the business

describe role of administration

involves record keeping of all business transactions and sending out invoices, keeping stock records ect.

describe role of marketing

performing any type of publicity for the business in the form of leaflets, newspaper advertisements. it also involves developing relationships with customers and carrying out market research as the brand develops

describe role of purchasing

businesses will have to buy resources all the time- so need to get best quality resources at the lowest possible price.

describe role of managing people

involves spending time on recruitment, selection and training as business develops

define intrapreneurs

employees who take initiative to innovate in job

describe driving innovation

uncovering new commercial opportunities to help businesses gain competitive edge and increase profits significantly

describe satisfying self actualisation

staff given opportunity to be creative and reach full potential-motivating staff and raising productivity

describe gaining awards

enhances image of business- can attract free PR which will promote the business

describe benefit of experimentation and creativity

opportunity to experiment and be creative without having to meet cost of failure- improves job satisfaction

4 benefits of employing intrapreneurial staff

-driving innovation

-satisfying staff self actualisation

-gaining awards

-benefit of experimentation and creativity

why people may not become entrepreneurs

-lack of finance

-lack of ides

-fear of failure

define anticipating risk

when entrepreneurs have control over risk they make a conscious decision to take a risk and to a certain extent

define anticipating uncertainty

uncertain events are impossible to predict, despite knowing they might occur

examples of anticipating risk

-test on smaller markets

-using quantitative techniques in decision making

-being aware that high risk=high reward

examples of anticipating uncertainty

-set aside contingency fund

-PESTLE/SWOT analysis

-risk assessments

-scenario planning