Them 1: section 5- Entrepreneurs and leaders

Entrepreneur

Is a person who sets up a business, takes on risks, with aim of some sort of reward such as profits

Roles of entrepreneurs

• creating and setting up

• Running and developing a business

• Burning innovation to the business world

• Overcoming barriers

• Anticipating risk ad uncertainties

Characteristics of an entrepreneur

• someone with an initiative

• Hard working

• Creative

• Self-confident

• Risk-taker

• Resilient

Why do entrepreneurs need specific skills

Good communication skills as they need to many different people so their message needs to be delivered with confidence, concise and polite manner

Team working skills is needed to be able to share responsibilities and consider the opinions of others

Solving problems so they can address different solutions and put a plan into action to sort the issue

Financial motives

Profit maximisation, means making as much profit as possible can be achieved b reducing costs t their minimum an increasing sales revenue to it maximum

Profit satisfying, means making enough profit but not pushing to maximise it the business doesn’t have shareholders they just make enough profit so they can have enjoyable lifestyle

Non-financial motive

• independence and having freedom

• Flexibility

• Working from home

• May find challenges of businesses rewarding once solved

• Motivated to make a difference to a social problem

Social enterprise

Business is designed to improve the quality of life of one particular group of people or for society in general

Leader

Someone who has a vision that they share with others while motivating them

Entrepreneur to leader

• delegating responsibility

• Develop emotional intelligence

• Become less reactive

Sole trader

Is an individual trading in their own name, or under a suitable trading name. Self employed , don’t necessarily work alone they can employ staff

Key features of sole traders

• full responsibility for the financial control

• Unlimited liability as they have full responsibility over debts

• Minimal legal formalities

Advantages of sole traders

• freedom

• Profit- entitled to all profits

• Simplicity- less form filling

• Savings on fees

Disadvantages of sole traders

• risk-no one to share the overall responsibility

• Time-work for long hours

• Expertise-limited skills

• Vulnerability-no one to cover when ill

• Unlimited liability-responsible for all debts

Partnership

You can start off as a sole trader then develop into a partnership as the business grows. The minimum number of owners needed to set up a partnership is two people. Unlimited liability so the owners have shared responsibility for the business debts

Advantages of partnership

• shared responsibility in decision making, share the costs and risks

• More owners so extend skills and idea

• More capital put into the business so it could grow faster

Disadvantages of partnership

• partners have to agree on business decisions

• All profits are shared

What are both types of limited company owned by

Shareholders

Private limited company

The owners have to agree before anyone buys or sells shares

Public limited company

Anyone can buy shares in the business, the shares are sold publicly on the stock market

What do both private and public limited companies have

Limited liability, the business and the owners have separate legal identities so the money that owners risk losing if the company goes bankrupt is limited to the amount that they have invested- their personal assets are not at risk

Franchising

Is an agreement which allows an entrepreneur to use the business idea, name, model and reputation of an established business

Franchisor

Is the established business which is willing to sell or license its idea, name, model and reputation

Franchisee

The entrepreneur that buys into the franchise

Online businesses

That trade through the internet, relative cheap and say to set up

Advantages of online Business

Good work life balance

Run from anywhere

Don’t require regular working hours

Disadvantages of online business

May not have IT skills

Technical issues like fraud, spam and viruses

Samples of situation in which businesses might need to make trade offs

• design mix

• Market research

• Business ownership

• Promotion

• Pricing stratergy