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Characteristics of an entrepreneur
Creativity, Risk taking, Determinations, confidence
What is an entrepreneur
A person who takes a business risk in the hope of gaining a reward
What is a purpose of business activity?
Spotting business opportunity, developing ideas or satisfying needs of customers
What is a business plan?
Details how business aims to achieve its objectives
what is the purpose of a business plan?
To risk and help business to succeed
What is in a business plan?
Business idea, market research, finance and objectives
Why is business plan important?
Helps entrepreneurs Focus on specific steps necessary to succeeded And helps achieve short and long-term objectives
What does a business plan help with?
Helps to reduce risk but not eliminate it
What types of business ownerships are there?
Sole trader, partnership, private limited company and public limited company
What is a sole trader?
An individual owning the business on their own and can employee people but they don’t share in ownership
What is two advantages and disadvantages of sole traders?
Get to make all your decisions and you keep all the profit but have unlimited liability and stressful to make all decisions
What is a partnership?
Started and owned by more than one person
What is two advantages and disadvantages of a partnership?
Jobs could be shared as well as losses, however you have unlimited liability and profits are shared
What is a private limited company (ltd)
Is a small or big business owned by shareholders
What is two advantages and disadvantages of LTDs
Limited liability and easy to raise finance as can sell shares however finance is limited to friends and family and less privacy
What are two advantages and disadvantages of public limited company (plc)
Limited liability and shares can be listed on stock exchange so it raises large sums of money however stakeholders have to agree how profit is divided and their is a risk of it being taken over
What is unlimited liability?
When business owner or owners are personally responsible for all of the debts of the business, no matter what the value.
What is limited liability?
When business owner or owners are only responsible for business debts up to the value of their financial investment in the business. This means that a creditor can only take assets or finances belonging to the company
What does aims mean?
State overall purpose for business
What does objectives mean?
Specific targets to meet the aims of business
What does social and ethical objectives mean?
Help society as a whole and makes sure the business has a positive effect on others
What is a stakeholder?
And anyone who has an interest in business or affected by the activities of businesses
What is a shareholder?
A person that owns at least one share of a business
Who are internal stakeholders
Owners, employees or managers
Who are external stakeholders?
Customers, local communities, supplies or government
How does a business grow organically/internally
Increasing output, gaining new customers, developing new products or increasing market share
What is two advantages and disadvantages of increasing market share?
Avoids risks of merging with another business and more power of buyers or suppliers however its a high risk strategy and expensive
What is horizontal growth
When two businesses are at the same stage of production
What is diversification?
When two businesses have no real connection in the chain of production
What is backwards vertical growth?
When a business merges with or takes over a business which supplies it with goods or services
What is forward vertical growth?
when a business takes over a company at a later stage in the production process
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