enterprise and entrepreneurs

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Being an entrepreneur

Qualities

You must be enterprising which includes:

  • Trying to be innovative and exploiting business opportunities 
  • times time to calculate risks
  • makes an investment to set up the business
  • takes a risk despite the risk of failure

Rewards

  • A sense of satisfaction
  • Being in control
  • Making that first sale
  • Opening a new location
  • Employing more people
  • Getting great feedback from customers and a good reputation

Key words: Innovation Risk Enterprise 

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Business Plan

A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts.

A business plan-

  • Provides a focus on the business idea - is it really a good one, and why?
  • Helps clarify thoughts and identify gaps in information
  • The plan provides a logical structure to thinking about the business
  • It encourages the entrepreneur to focus on what the business is really about and how customers and finance-providers can be convinced
  • It helps test the financial viability of the idea - can the business achieve the required level of profitability and not run out of cash?
  • Provides something which can be used to measure actual performance
  • Is essential to raising finance from outside providers - particular investors and banks
  • It should show that the business has a USP
  • Who/how large the target market is
  • Sources of finance
  • Aims & Objectives
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Franchise

franchisor grants a licence (the "franchise") to another business (the "franchisee") to allow it to trade using the brand or business format. 

Advantages

  • It is your own business even though you share your profits
  • It's tried and tested so has likely success
  • The franchisee gets training and support where they wouldn't if it was sole trader
  • Franchisor supplies equipment
  • Easier to build a customer base
  • Overall a low risk method of starting a business

Disadvantages

  • not cheap to start up, high initial fees and ongoing royalties
  • restrictions on marketing ideas and control of product range, branding etc
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Business Value

You can add value to the business which means the difference between the worth of the finished product/service and the costs. A business of a higher value has a greater profitability.Yiu can improve the value by:

  • Building a brand – a reputation for quality, value etc that customers are prepared to pay for. 
  • Delivering excellent service – high quality, attentive personal service can make the difference between achieving a high price or a medium one
  • Product features and benefits – for example, additional functionality in different versions of software can enable a software seller to charge higher prices; different models of motor vehicles are designed to achieve the same effect.
  • Offering convenience – customers will often pay more for a product that they can have straightaway, or which saves them time.

Benefits

Charging a higher price, creating a USP, focussing on the market segment.


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Business Value

You can add value to the business which means the difference between the worth of the finished product/service and the costs. A business of a higher value has a greater profitability.Yiu can improve the value by:

  • Building a brand – a reputation for quality, value etc that customers are prepared to pay for. 
  • Delivering excellent service – high quality, attentive personal service can make the difference between achieving a high price or a medium one
  • Product features and benefits – for example, additional functionality in different versions of software can enable a software seller to charge higher prices; different models of motor vehicles are designed to achieve the same effect.
  • Offering convenience – customers will often pay more for a product that they can have straightaway, or which saves them time.

Benefits

Charging a higher price, creating a USP, focussing on the market segment.


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Objectives: Financial

The main objective of a new business is survival. Start ups have a huge failure rate so busisness strive to survive. To survive a business needs:

  • Sufficient sources of finance (e.g. cash, a bank overdraft, share capital)
  • viable business model – i.e. one which can make a profit

If the business survives, the next aim is profit. When profit is made it can be retained and reinvested or withdrawn for personal use.

For small businesses profit is a reward for risk taking and hard work. This usually rises after a few years of trade due to growth and increased sales.

Another financial objective is personal wealth. Entrepreneurs aim to build a valuable business that can substantially increase their personal wealth.

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Business Ideas

Blue skies thinking

  • This is where there is no limit on ideas or suggestions, as many ideas as possible is encouraged. It is carried on until the flow of ideas has ended

Lateral thinking

  • 'thinking outside the box' coming up with ideas that aren't obvious. Coming up with new and unexpected ideas

Six thinking hats

  • Neutrality-considering what information is available
  • Feeling- gut reaction or emotions
  • Negative judgment- thinking about thinks that could go wrong
  • Positive judgment- identifying benefits
  • Creative thinking- seeing where a thought goes
  • Process control- thinking about the ideas from the other 5 hats
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Social Enterprise

'not-for-profit' business who's aims and objectives are not money

A social enterprise is a proper business that makes its money in a socially responsible way. These ventures are not necessarily formed to reinvest all profits into the communities. Social entrepreneurs can make a good profit themselves.  However, their business model is also designed to benefit others. 

Social enterprises complete alongside other businesses in the same marketplace, but use business principles to achieve social aims. 

A few things all social enterprises have in common are:

  • They are directly involved in producing goods or providing services
  • They have social aims and ethical values
  • They are self-sustaining, and do not rely on donations to survive (i.e. they are not charities)
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Beating Competiton

Product

  • They need to have more than one product to be successful as this offers a wider product range. This will attract more customers potentionally too.

Quality

  • Quality that meets customer needs is considered good. The customer may want somethign that is 100% reliable or which uses high quality materials
  • customers trust brands so a brand with good quality will recieve more sales that an unknown brand

Customer service

  • If your products are similar to competitions, one way of beating them is with customer service, this gives you a good reputation. Staff should be well-informed and friendly.

Price: Making prices lower than competition as well as having lower costs will make you more successful,

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