Business Unit 1
Enterprise: The ability to handle uncertainty and deal effectively with change.
Entrepreneur: Someone who starts and runs a business and has responsibility for the risks involved. They must be able to manage 4 factors:
Land or natural resources
Innovative, imaginative, creative- in order to come up with new ideas for business/product/service
Passionate (about their business idea) -this is important, as it is internal motivation and drives to make their idea into a successful business.
Willing to take responsibility- entrepreneurs is responsible for organizing the resources.
Willing to take calculated risks and tolerant of uncertainty-Entrepreneurs normally invest their own money which there is no certainty of success.
Hard working, persistent, determined and energetic- a great deal of time and commitment are needed to set up a business on successful footing.
Self confident- this is important, as you need confidence to inspire others for example, employees, suppliers etc.
Optimistic- setting up a business is tough and might not always go to plan. So by being optimistic this can ensure that the entrepreneur wouldn’t give up at the first hurdle that they face.
Flexible- sometimes things happen that cannot be planned so being able to adapt your original ideas to fit in with the competitors could save your business.
Decisive- many timely decisions are required to be made at the beginning like, the positioning of the business, pricing and these kind of decisions are needed to be made continuously throughout the running of the business.
The motivation for becoming an entrepreneur:
To escape an uninteresting job
To peruse and interest or a hobby
To exploit a gap in the market
To market a new or innovative product
To be innovative in terms of the process of making a new product
To be their own boss
To work from home
To have a second career
To provide a service or a product not for profit
To make more money
To create a successful business
Risks: The possibility of an event happening that could cause destruction or damage of something perceived to have value.
Risk taking is a key feature of being an entrepreneur and economists define entrepreneurs and risk takers. However good entrepreneurs are ones that take calculated risks where there is a high chance for success.
If the risk fails it can lead to…
Own money lost out
On going debt from borrowed money
Low self esteem
Risk of not getting another job or having to face the stigmata of ‘failure’
Reward is the expected return, which is either financial, or other, or based on the risk taken.
Profit is the reward for the risk; the excess of sales revenue over costs.
Undertaking initial (and ongoing) market research. This is more likely to detect problems with strategies as well…