Business- Theme 1.5: Entrepreneurs and Leadership (copy)

Entrepreneur

A person who organizes, manages, and takes on the risks of a business.

Intrapreneur

Employees who use entrepreneurial skills, without having to risk their own money, to find and develop initiatives that will have financial benefits for their employer

Characteristics of Entrepreneurs

Creative, Ambitious, Risk taker, Innovative, Numeracy Skills, Problem-Solver and Team work.

Barriers to entrepreneurship

Lack of finance, Lack of entrepreneurial capacity, Becoming an employer, Legal barriers, Lack of ideas, Fear of failure, Aversion to risk, Corrupt and unsupportive environment

Reasons for Entrepreneurship

Opportunity, Profit, Independence, Flexibility, Ethical Reasons, Work-Life balance and Challenge

Objective

The goals or targets set by a business to help achieve its long-term purpose

Aim

What a business tries to achieve in the long term

Profit Maximization

Setting prices so that a business achieves the greatest difference between Total Revenue and Total Costs.

Profit satisficing

Making enough profit to satisfy the needs of the business owner(s)

Sales Maximisation

An attempt to sell as much as possible in a given time period (or an attempt to generate as much sales revenue as possible in a given time period)

Survival

To continue operating the business and not going bankrupt.

Life Style Business

A business that aims to make enough money and provide the flexibility needed to support a particular lifestyle for the owner

Social Enterprise

A business that trades with the objective of improving human or environmental well-being

Sole Trader

Business owned and operated by one person, with Unlimited liability

Partnership

A business in which two or more people operate and own the business, with Unlimited Liability.

Deed of Partnership

A binding legal document that states the formal rights of partners

Types of Partners

Active- Day to Day Management and Operation of business Sleeping- Does not participate in management but has sufficient money in business Nominal- No interest in firm, only lending name.

Co-operative

Business wholly owned by its employees with the emphasis on group decision making.

Limited Liability

A legal status which means that a business owner is only liable for the original amount of money invested in the business

Unlimited Liability

A legal status which means that the owner of a business is personally liable for all business debts

Private Limited Company (LTD)

A business organization owned by shareholders with limited liability but whose shares cannot be bought or sold to the general public.

Public Limited Company (PLC)

a limited company whose shares can be freely bought and sold by members of the public

Steps to becoming a limited company

-Article of Association: A document that provides the details of the internal running of a limited company

-Memorandum of Association: A document that sets out the constitution and states key external details about a limited company

-Certificate of Incorporation: A document that declares a business is allowed to trade as a limited company

Stock market

A system for buying and selling shares of companies

Stock market flotation or initial public offering (IPO)

The process of a company 'going public' - making shares available to the public for the first time

Choices

Deciding between alternative uses of resources

Opportunity Costs

The benefit of the next best alternative forgone.

Trade offs

Where a business faces a compromise between two different examples; for example, between paying dividends to shareholders and re-investing profits in the business

moving from entrepreneur to leader

Learning to Delegate, Trust others, Listen to others, Have an open mind, Less Reactive More Proactive, Develop Emotional Intelligence