Enterprise: This is the process by which new businesses are formed and services are created. these are usually led by Entrepreneurs.
Entrepreneur: Individuals who have an idea that they develop by settnig up a new buisness. They take risks and profits that come with the sucess or losses that come with failure.
Characteristics of an Entrepreneur are:
- Willingness to take risks
- Ability to take advantage
- Determination and persistance
- Relevent skills
Motives for becoming an entrepreneur
Importance of Risk and Reward
Failure in a buisness occurs for for reasons such as:
- Lack of Finance
- Poor Infrustructure
- Skills Shortage
- Complexity of regulations
Opportunity Cost: This is the real cost of taking a particular action or the next best alternative. For example leaving a job with a really good wage to start your own business.
- Goverment encouragment to become an entrepreneur
- Increasing wealth
- The pace of change
- The desire for more independance at work
- A wish to make money
- A desire to make a talent of skill
- Attempting to make employment
Goverment Support for Enterprise
The goverment supports entrepreneurs for severeal reasons such as;
- To provide more products to the community
- To reduce unemployment
- To fill Market Niches
Goverment Support is Provided by:
- Reducing business taxes
- Reducing the burden of regulations
- Reducing barries to rasing finance for small businesses
- Improving support of new businesses
- Promoting change in the UK's Enterprise
- Funding projects to raise awarness about enterprise
Sources of Business Ideas
Ideas can be generated by the process of brainstorming or can come from the entrepreneurs own personal experiance. Research suggests there a 4 major sources of ideas for Entrepreneurs.
- Spotting trends and anticipating their impact on peoples lives.
- Noticing something that is missing from the market or something that can be improved.
- Copying ideas from other countries
- Taking a scientific approach
Once a business has used these methods it needs to identify the both the product and the market niche it will target. Looking at the sources above, the business must then plan its actions carefully.
A franchise is when a business ( the franchisor) gives the right to supply its product or service to another busines ( the frachisee).
Types of Franchise
- Business format franchise: This is when the owner of a business grants a licence to another person or business ( the franchisee) to use their business idea. the franchisee sells the franchisor's products/ service under the trademark or tradename.
- Distributorship and dealership: Here the franchisee sells the products but does not trade under the franchise name. This allows the franchisee more freedom over how to run the business.
- Agency: This is where the franchisee sells goods or services on behalf of the supplier.
- Licencing: Here the franchisee has a licence giving them the right to
Protecting a Business Idea
Copyright: This is legal protection