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Entrepreneurship
The activity of setting up a business or businesses to address needs in the market , taking on financial risk in the hopes for profit.
Skills of an entrepreneur
effective business managers
have creative innovative skills to develop a new idea.
problem solving skills.
tolerance for risk
ability to overcome failure.
Personal motivation for starting a business
Financial independence
having control over all finances and therefore determining your own income and having enough income to cover living expenses without needing to work actively.
Personal independence
Personal independence enables the business owner to have full control over their business. This includes planning day-to-day operations and financial control.
work-life balance
Making a profit
The motivation to earn significant income often drives individuals to start their own business.
Profit
A financial gain, money that remains once you deduct expenses from revenue.*
Fulfilling a market need
identifying a gap in the market and providing a good or service that satisfies a demand within a target market which is currently unavailable, motivating business owners to establish a business.
Fulfilling a social need
Contributing positively to a need that exists within society. This may involve providing jobs for the unemployed, enhancing quality of life for disadvantaged people, or addressing environmental concerns. Social enterprises operate for profit but focus on community or environmental benefits.
Characteristics of successful managers and entrepreneurs
Benefits
Being your own boss — independence
Possibility of making a profit
Decision making and developing creative ideas
Limitations
Heavy workload and long hours
Risk of failure
Fluctuating or uncertain income
Successful managers
Responsible for the successful operation of a business. These individuals aren’t typically the founder or owner however do require skills.
Characteristics and expectations of successful business managers
Oversee designated area of responsibility
Communication, delegation, planning and decision making
Knowledgeable, experienced and have the ability to communicate with stakeholders
Always act ethically and with integrity when representing the business
Successful entrepreneurs
Entrepreneurs are creative ambitious and have significant vested interest in the success of their business. They have a heightened sense of what customers desire.
Characteristics and expectations
Demonstrate management skills
Assume calculated risk
Knowledge of customer and market needs above competitors
Courageous, resilient and not afraid to view failure as an opportunity for improvement.
Business success
Managers and entrepreneurs assess their business success though financial success with focus on corporate social responsibility (CSR)
CSR
business practice where companies go above and beyond to positively impact the community and environment
Business success can be measured through
Qualitative measures - Key performance indicators (KPIs)
KPI’s - criteria used to measure efficiency and effectiveness of business performance
Quantitative measures - Financial performance such as net profit, percentage of market shares, number of sales
sources of business opportunity
Innovation
Innovation creates new markets and opportunities for businesses. Innovation involves creating an entirely new or making improvments to existing goods or services
Market opportunities
Markets are always changing, businesses can identify and take advantage of these gaps in the market to meet the demand of consumers and offer products that either don’t currently exist or are inadequate.
Changing customer needs
Changing customer needs refer to the evolving preferences, expectations, and demands of consumers due to factors like trends, technology, economic shifts, and lifestyle changes.
Research and development
The process of creating goods and services/ improvements to existing ones through innovation, experimentation, and testing. Helping businesses innovate and stay competitive leading to new products, improved technologies and efficiency.
Technological development
provides opportunities for new products and processes. Advances in communication, like the internet and mobile phones, enable rapid information sharing and global market access helping businesses produce high-quality products efficiently.
Global markets
Globalisation - The process by which businesses develop international influence or start operating on an international scale
Global markets provide access to customers and increasing sales potential. This results in business expansion and reduced reliance on local markets.
Goal setting
The importance of goal setting
Goals provide clarity, purpose and a sense of direction for employees within a business. A lack of objectives will lead in confusion and lack of productivity.
Goal setting
The process of deciding what you want to achieve, or what you want someone else to achieve over a particular period of time.
Type of goals
- Financial goals
- Social goals
Financial goals
1. Making a Profit
2. Increase Sales
3. Increase Market Share
4. Expand the Business
Social goals
1. Resolve community issues
2. Reduce business impact on the environment
3. Focus on employee welfare
SMART goal
S - specific
M - measurable
A - attainable
R - relevant
T - time bound
Importance of decision making
Key skill for business owners, by defining a clear goal, assessing options and choosing the best course of action Crucial for assessing the potential success of a business idea and ensuring its feasibility.
business concept development
The initial idea of a business, used as the launchpad to develop a product offering. Once established businesses should seek to protect their Intellectual Property (IP).
Intellectual property
Creations of the mind, such as inventions, brands or designs which can hold commercial value or provide a competitive advantage, making it crucial to protect these ideas from being copied by competitors.
How to protect IP
Trademark: Symbols, design, or phrase legally registered to represent a company or product.
Copyright: Type of intellectual property that protects original creative works.
Patent: Government authority or licence providing businesses with rights for a set period to exclude others from using it
Concept development and business opportunity
A business opportunity is first identified and then is refined and enhanced through concept development, where a very simple but opportunistic idea becomes a viable solution and actual business.
market research and initial feasibility
Market research
is the collection of data from consumers that gauge their opinion towards existing products, and potential concepts that may enter the market.
How businesses carry out market research
- Survey - a series of open and or closed ended questions
- Interview - One-on-one extended conversation to gauge opinion
- Focus group - A selection of targeted stakeholders to gather insights
- Customer observation - watch potential consumers engage with the product
Initial feasibility studies
research that determines if a business concept is likely to be successful. Involves evaluating costs, risks, and benefits before proceeding further.
Businesses’ contribution to the wellbeing of the nation
Economic growth
The increase in a country's production of goods and services over time, typically measured by GDP.This benefits various stakeholders including employees and members of society.
Gross Domestic Product (GDP)
The total value of all the goods and services produced by a country in one year.
International trade
Occurs which businesses engage in importing and exporting. This provides Australian consumers with greater options and lower prices.
Research and development
Can improve the customer experience, reduce production costs, and provide innovative goods and services.
Social wellbeing
The employment of staff and continued focus on CSR leads to improved outcomes for society. This includes enhanced standards of living, reduced impact on the environment, and improved employee welfare.
Economic wellbeing
Functioning economy provides opportunities for both businesses, consumers, and members of society to financially fulfil their needs.
Economy
The process or system by which goods and services are produced, sold, and bought in a country or region.
Employment opportunities
The employment of staff is considered the greatest contribution to the wellbeing of the nation as It provides income to individuals which is re-invested into the economy.
Taxation revenue
Businesses contribute from the sale of their goods and services, as well as through paying their employees income. Government
use this revenue to support society.
Infrastructure
The infrastructure of a society consists of facilities such as transport, utilities, and buildings, which enable it to function. Businesses significantly contribute to the planning, construction and maintenance of such projects.
Business innovation and entrepreneurship
Government investment in research and development
Governments can provide financial incentives to encourage businesses to undertake research and development within their government area.
Council grants for new businesses
council grant is a financial award given by a local government to support community projects. Helps businesses to establish themselves, employ local workers, and positively contribute to society.
School-based education programs
The purpose is to explore the advantages and disadvantages of entrepreneurship in schools.
It teaches the skills required in business, whilst simultaneously sparking the interest of students.
Regional start-up hubs
Governments are recognising innovation that exists in regional areas of the state and country and are encouraging entrepreneurs to develop their business ideas, facilitating them to start their businesses via subsided centres providing support.
