Developing A New Business Idea

Developing New Business Ideas

Chapter 1: Characteristics of an Entrepreneur

Entrepreneurial qualities

An entrepreneur is a person who has ideas and makes them happen. This involves setting and running their own business/es. Initially they may work alone, but as income increases they may start to employ workers.  

Some personal qualities or characteristics make it more likely that a person will have a successful idea and be able to see it through to completion.

Entrepreneurial characteristics

·         Characteristics are personal qualities which an entrepreneur possesses.

·         Regulations are rules that businesses have to follow. These can be laws made by the parliament or rules written by an organisation which regulates a particular industry.  (OFCOM)

·         Capital investment is spending on equipment and premises.

·         Working capital is the money available to fund the day to day running of the business.

Chapter 2: What Motivates Entrepreneurs?

Profit: is sales revenue less all the costs of production.

-It helps to compensate the entrepreneur for carrying the risks associated with running a business. Money left over from all the sales revenue when costs have been paid.

-Obvious reason for setting up a business makes, the richer the owner will be become.

-There is a visible link between their effort and their financial reward.

Profit= Total Revenue – Total Cost

Motives: are the factors that encourage an entrepreneur to go into business and to take particular decisions.

Non-profit motives: are reasons for setting up the business which are not linked to the making profit.

·         Control over working hours or location

·         Continuing a family business

·         Self-fulfilment

·         control your own work

·         Creativity

·         Making money from  a hobby

Ethical motives: are reasons linked to doing ‘what is right’. For example, setting up a business or organisation which benefits a section of the community or which is committed to ethical employment and sourcing activities.

Chapter 3: Leadership Styles

-          The process of influencing others to work willingly towards an organisation’s goals’.

-          Business managers set objectives and must then organise their resources so that they can be achieve.

The leader’s role:
- leaders need to provide themselves with the motivation to work effectively
3 features overlap:

1. Task needs
2. Group needs
3. Individual needs

-          Completing the task is obviously important. There are business objectives and practical goals to be met.

-          A situation where a creative approach is required, the leader who manages through attention to working relationships within the group may be able to achieve more (relationship orientated leaders).

-          Individuals within the group will have their own psychological needs. The leader has to work out whether encouragement is needed and where penalties may be required

Motivation: means using the right strategy to help employees work more effectively. By meeting the needs of the businesses situation and the employees, leaders and…