Professional Documents
Culture Documents
Enterpreneurs
Enterpreneurs
WHAT IS AN ENTERPRENEUR?
An entrepreneur is an individual who make the business idea happen either by their own
efforts or by organizing other people to do it.
Self-
confidence:
They are people
Creative: who believe that
comes with think they are
new and going to succeed
unique ideas. and have the
abulity to
persuade others
as well.
Take initiative:
Resilient:able seizing
to withstand opportunities, they
or recover are able to change
quickly from and be proactive as
difficult events don't allow
them to overwhelm
conditions. them.
FINANCIAL INCENTIVE: To earn more money and profit is the driving force behind many
entrepreneurs.
Profit maximization: Make as much as profit as they possibly can in a given period.
Key focus FINANCIAL RETURN ON THEIR EFFORTS.
Profit satisficing: Aim to make enough profit to maintain their interest in the business.
A business that generate enough profit to provide the flexibility needed to sustain a
particular lifestyle. Making enough profit to satisfy the needs of the business owner.
NON-FINANCIAL INCENTIVE: -
Personal experience. Some people draw on their personal experience outside of work to find a
business idea. Some turn a hobby into a job. An amateur cyclist might buy a cycle shop. A keen
gardener might set up a nursery. Some use their customer experience to spot a gap in the market. A
mother might find it difficult to find a baby product and so set up a business to provide it.
Skills. Some entrepreneurs draw on their broad skills base to start a business. A person with an
administration job might judge that they have good ‘people skills’ and decide to set up a business in
selling. A plumber might judge that in his area electricians can charge more for their work. So he gets
training as an electrician and sets himself up as a self-employed electrician.
Lifestyle choices. Some business areas attract people who want to make a lifestyle change. They
might want to move to the country and invest in a small holding.
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CREATING AND SETTING UP A BUSINESS.
1) IDEA
2) RESEARCH – The viability of the business idea has to be research – may involve carrying out market research
and analyzing the competition to decide whether the idea is likely to work.
3) PLANNING
4) FINANCING – Entrepreneurs have to decide how much finance they will need and which sources they will use to
obtain it.
5) LOCATION – The location an entrepreneur chooses will depend on the nature of the business. Certain types of
business activity may need planning permission.
6) RESOURCES – The business plan will contain a list of the resources need to set up and run the business.
Entrepreneurs will need to find suppliers of materials, utilities and other day to day resources.
7) LAUNCH
RUNNING A BUSINESS.
Developing a business
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Different ways of structuring a business, including:
SOLE TRADER
Sole trader is an individual who owns and operates his or her own business.
A sole trader is the only one who benefits financially from success, but must face the burden of any failure.
The business and the individual are the same, as the owner has unlimited liability for any debts that result from running
the firm.
- If a sole trader is unable to pay his or her bills, the court can allow personal assets to be seized by creditors in
order to meet outstanding debts.
- If insufficient funds can be raised in this way, then the person will be declared bankrupt.
There are no formal rules to follow when establishing the business or administrative costs to pay.
Complete confidence can be maintained because accounts are not published.
Sole trader is the limited sources of finance available, long working hours of work involved.
PARTNERSHIP
Partnership exist when two or more people start a business without forming a company.
They have unlimited liability so it is vital that the partners trust each other.
ADVANTAGES DISADVANTAGES
Additional skills: a new partner may have abilities which Sharing profit: the financial benefits derived from
the sole trader does not possess. These can help to running the business will have to be divided up between
strengthen the business, perhaps allowing new products. the partners according to the partnership agreement
made on formation.
More capital: A number of people together can inject Loss of control: Decision making has to be shared as no
more finance into the business than one person alone individual can force an action on the business.
which makes expansion easier.
Shared strain: The new partner will help to share the Unlimited liability where owners share several
worry of running the business, as well as taking on a share responsibility for the entire amount of debt by the
of workload. business.
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Limited liability: The legal duty to pay debts run up by a business stays with the business itself, not its
owners.
LIMITED COMPANY
To gain the benefits of limited liability, the business must go through a legal process to become a limited company.
The process of incorporation creates a separate legal identity for the organization.
The Articles of
The Memorandum Association
of Association
•Outline the internal
manament of the
company. THis
• The document includes the rights of
that sets up the shareholders,the
role of directors and
company. frequency of
shareholder
meetings.
1. Limited companies have to follow more, and more expensive, rules than unlimited liability businesses.
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CO-OPERATIVE.
1. Market research
2. The market
3. Positioning
4. Product trial
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1.3.3 Supply and demand
1. Demand
2. Supply
1.3.4 Finance
1. Sources of finance