Enterprise and Entrepreneurs
Enterprise is the ability to handle uncertainty and deal effectively with change, the skills needed to make a new idea work.
This could be an organisation specifically established for business activities.
This could be an individual embarking upon new challenges, inspirational, original, innovative.
Entrepreneur is someone who starts and runs a business and has responsibility for the risks involved. An entrepreneur has to be able to manage the 4 factors of production effectively, land or natural resources, labour, capital and enterprise. Serial entrepreneur sets up many different businesses.
An entrepreneur is able to make an enterprise work and has to be an excellent decision maker who knows how to apply the right solutions to problem in order to stimulate efficiency of the enterprise.
Key characteristics- self confidence, leadership, clear goal setting, drive and energy.
Motives- pursue an interest, be creative, make decisions, market a new innovative product.
Benefits- creation of jobs, increase in export earning, greater production of goods and services, higher tax revenue for government, enhancement of modern technology.
Risk and Opportunity Cost
Risk occurs when the likelihood of a problem arising is estimated. Uncertainty occurs when you don't know if something will happen or not.
Entrepreneurs take risks usually using their own money, in return they expect a reward, financial or non financial- satisfaction of meeting customer needs.
The general conception of risk is that the higher the amount of risk taken, the higher the amount of profit will be made, however this is not always the case.
It's important that a good entrepreneur can identify business opportunities and take reasonable levels of risk without jeopardising the business enterprise.
Risk management is a necessity- identify the risk, quantify it, manage it and mitigate it.Reduce the risk (safeguard), use a third party to remove the risk directly (insurance), try to avoid risk retention (have alternative suppliers ready).
Opportunity Cost is the cost of an activity expressed that has to be given up for the next best alternative when making a choice.Alternatives are good in their own respective ways, the best choice must be made in order to optimise resources, maximise profit and minimise risks.
Market gaps are created by the lack of quality products available, consumers need a new product or service, limited supply in the market for a given product or service, cheaper products or more expensive luxury products.
If your new idea can fill the gap in the market, the next thing to do is confirm that this is a genuine opportunity.
Development of innovative and new products and processes, it can't be over emphasised how important it is to know about the markets for which these new ideas are made for.
You must also clearly understand your intended market.
You also need to be fully aware of the competition.
All these factors can clearly be known by a conducted campaign of market research.
There are several organisations that have been set up to ensure the needs of various businesses are met.
The organisations are regulated and provide information, funding, support and advise businesses on different issues in order to improve their competitiveness.
Enterprises benefit the economy, the government is very keen to offer support and advice.
DBERR- simplify the process of starting and running a business, reformation of company law.
DIUS- promote business research, propelling enterprise and efficiency, creation of new products and services.
RDAS- required by law to provide enhancement of business competitiveness and efficiency, promote employment, contribute to sustainable economic development, foster the development and application skills which are relevant to employment, promote economic development and regeneration.
Government Grants and Business Plans
Government Grants are a sum of money given to a business for a specific purpose of project.
They often contribute to the costs of a project rather than fund the whole thing.
Grants don't usually have to be paid back.
It is part of the responsibility of the government to ensure that enterprises are well regulated and informed as to the best business actions that derive the greatest benefits to both the business and the economy at large.
Business plans are needed to get some support, outline the purpose and intentions of the business and the future goals it aims to achieve, the target market, products, services, competition and funding.
Small businesses are important to the UK economy for the simple reason that they're the origins of the large successful business of the future.
- prepared to work very hard
- cope well with stress
- has a vision of faith in their idea
- willing to take a risk
- well rounded-make the product,promote it,sell it,count the money
- able to bounce back
- able to carve a niche in the market
- results orientated
- goals and targets
- professional risk taker
- totally committed