Overview for topic 1.5.1 – 1.5.6

1.5.1 Role of an entrepreneur1.5.2 Entrepreneurial motives and characteristics 1.5.3 Business objectives1.5.4 Forms of business1.5.5 Business choices1.5.6 Moving from entrepreneur to leader

Syllabus for 1.5.2

Candidates should be able to:• Assess the characteristics and skills required

• Evaluate reasons why people set up businesses (financial motives: profit maximisation and profit satisficing; non-financial motives: ethical stance, social entrepreneurship, independence and home working)

EntrepreneurWhat is an entrepreneur?

What are the characteristics of an entrepreneur?

What is the average age in the UK of an entrepreneur?

What are the skills of an entrepreneur?

What’s the difference between characteristics and skills?

Characteristics are

Skills

What are the main motives of an entrepreneur?

Financial motives from syllabus

• Profit maximisation – making the ______ _______ in a given time period (The Apprentice!). It is usually short term:

Long term financial motive tends to be:• Profit satisficing – making the

Non-financial motives from syllabus

Syllabus for 1.5.1Candidates should be able to:• Explain the process of creating and setting up a business and then running and expanding / developing it

• Assess innovation within a business (intrapreneurship)

• Analyse the barriers to entrepreneurship

• Assess the importance of anticipating risk and uncertainty in the business environment

Entrepreneurs and innovatorsAn entrepreneur is someone who is willing to take risks, show initiative and set up their own businessThey are innovators. What does this mean?

Creating and setting up a businessWhat are the stages?1. Generate an idea 2. Small budget research3. Planning4. Financing5. Location6. Resources7. Launch

Stage 1: sources of business ideasHow do entrepreneurs think of ideas?

Stage 2: initial researchOnce an entrepreneur has an idea they need to carry out small budget research - why?

Stage 2: example

• What research would you need to do before setting up a personal trainer? How would you find the information you needed?

Stage 2: market research – customers and competitors

Stage 2: research starting a business

Stages 3 - 5

Stage 3: planning a business: 2.1.4Stage 4: financing a business: 2.1.1, 2.1.2Stage 5: locating a business – what will this depend on?

Stages 3 - 5: example

• What planning would you need to do before setting up a personal trainer?

• What finance would you need?• Where would you locate your business?

Stages 6 - 7

Stage 6: resources. What will be needed?

Stage 7: launch. How will it launch?

Stages 6- 7: example

• What resources would you need to do before setting up a personal trainer?

• How would you launch?

Running a businessRunning a business is not necessarily as exciting as starting it. Entrepreneurs want repeat customers and so they need:1. Good organisational skills and concern

for customer satisfaction (or delight)2. The ability to listen to objective advice3. An obsessive eye for detail4. To think strategically as well as deal with

day-to-day issues

Expanding a businessWhat will be needed in order to expand a business successfully?

IntrapreneurshipIntrapreneurship refers to an entrepreneur within a large firmWhat type of firm are they in?

It requires a leader who sees the value in intrapreneurship e.g.

IntrapreneursIntrapreneurs are employees who use entrepreneurial skills to find and develop initiatives that will benefit their firm financially.Why are they different to entrepreneurs?

Benefits of employing intrapreneurs

Barriers to entrepreneurship

Risk and rewardKey rewards –

Key risk –

Risk and rewardEntrepreneurs need to be able to anticipate risks and accurately assess the rewards.They should aim to ________ the risk where possible.Remember opportunity cost too!