How do entrepreneurs get inspired for a new busine
A completely ne business idea...
- complete market research
- Solving a problem
- Noticing a new trend or fashion
Using an existing idea, but differentiating it...
- Selling an existing product cheaper
- better customer service
- updating and improving an existing product
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Why might an entrepreneur be attracted to franchis
- good national advertising - guarenteed success
- Strong customer base
- more sales revenue because that business is well known
- help and support
- less risks
- easier and quicker from starting from fresh
- already got desgned products and a supplier
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what are the disadvantages of buying a franchise?
- You pay royalty fees to the franchisor (a percentage of the sales revenue)
- Other franchises of that business might give you a bad reputation if they're poorly run.
- You don't have any control over the products your business sells.
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What are the advantages and disadvantages of being
- you don't share the profits with anyone
- The owner has sole control over decisions
- They can work flexible hours that suits them
- one person may not have all the expertise needed to run the business
- There is only one person to invest finance into the business
- The owner has unlimited liability, which can be stressful.
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What are the advantages and disadvantages of a par
- More finance can be raised as each partner can invest in the business
- Partners can cover for each other if one is absent
- More owners means more expertise that can be drawn on
- Multiple owners means there is potential for conflict
- Partners have unlimited liability
- The profits must be split between more people.
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What are the advantages and disadvantages of a ltd
- All shareholders are protected by limited liability
- New shareholders can be brought into the company, raising extra finance
- There is no limit to the amount of shareholders in an ltd
- Profits are split between more owners
- There are more laws and rules that affect ltd's
- There is the potential for conflict and power struggles between shareholders
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What are the requirements of a private limited com
- they must send a yearly financial record to the government.
- They can only sell shares privately, they can't sell them to the public on the stock exchange
- All the shareholders have a say in the running of an ltd
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What are the typical objectives for new businesses
- Survival - make sure the business survives its first 12 months without taking on too much debt.
- Sales Growth - increase the number of sales the business makes each month by a certain percentage.
- Profit - To achieve a target amount of profit by the end of the year.
- Market Share - increases the amount of sales the business has compared to competitors.
- Customer Satisfaction - Develop a reputation for good customer service so that customers are loyal and spread word of mouth publicity.
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What can stakeholders do to influence the objectiv
- Employees - could stop working (strike) or not do their job properly. Depends how much pay they want.
- Customers - not buy the products(go to competition) or may not come very often. Depends on how much they are willing to spend.
- Local Community - may not be enough people in the local community to fund and buy products from the business or they could sign petitions.
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Who would look at a company's business plan?
- The Entrepreneur - can use their business plan to know where they are going and measure how their business is performng to help them make decisions about the future.
- Banks - When lending money to an entrepreneur they would demand a business plan before so that they can decide whether the business is realistic enough to earn a profit to pay back the loan.
- Investors - If you were considering investing money into a particular business you would want to see the business plan to see if the business is worth investing into.
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