- Created by: Michelle Stephens
- Created on: 17-02-14 10:36
UNIT 1 – BUSS 1
Planning and Financing a Business
Enterprise refers to the qualities and talents a person needs to be a successful entrepreneur.
An entrepreneur is a person who takes the risk in starting a new business.
Qualities of a successful entrepreneur:
Dreamer – having a big idea of how something can be better and different.
Innovator – demonstrating how the idea applied outperforms current products.
Passionate – being expressive so that the idea wins approval from others.
Risk taker – pursing the dream without having all the resources needed at the start.
Dogged Committer – staying with the idea through ups and downs
Continuous learner – constantly exploring and evolving to do best practice.
Risk and Rewards
Risk is the possibility of incurring some misfortune or loss. Entrepreneurs have to learn to live with risk as many new businesses fail. Surveys suggest that between 20% and 30% of new businesses do not survive their first year of trading. If a business fails, it is often the case that the entrepreneur behind it loses some or all of his or her personal wealth
. New businesses can fail for a number of reasons:
· There is insufficient demand for the product
· Poor infrastructure
· Skills shortage
· The costs of setting up and running the business may be higher than expected.
· The business runs out of cash.
Rewards are those things that an entrepreneur receives in return for taking the risk of starting a new business. The most obvious reward is money. There are other rewards too, these include being one’s own boss and not answerable to anyone else, having the satisfaction of creating a business and the possibility of passing it on to your children.
Examples of financial reward
· Karen Darby sold SimplySwitch to the Daily Mail for £22 million.
· Linda Bennett sold her fashon chain (LK Bennett) for £70 million.