Entrepreneurship

• An entrepreneur is an individual who sets up a business accepting and facing the risks and enjoying the rewards, the process of starting up a business is called entrepreneurship. An entrepreneur is seen as an innovator bringing in new ideas and providing goods or services
• A sole trader is a business owned by one person.

  They are usually small in size. Hairdressers, butchers, and electricians often operate as sole traders.

  Sole traders rely on their own savings, bank loans or loans from friends and family to finance their business. (Private Sector)
• Unlike a private limited company, a public limited company can offer shares of the business to the public.

  There are some requirements which a company must meet before they can become a Plc.

  • they must have share capital of at least £50,000
  • they must have two shareholders, two directors, and a qualified company secretary
• What is one option an entrepreneur has when starting a business?

  Set up a new independent business
• What is franchising?

  Buying into an existing business idea
• Who is the franchisee in a franchise agreement?

  The buyer of the business rights
• Who is the franchisor in a franchise agreement?

  The seller of the business rights
• What do many well-known high street opticians and fast food restaurants have in common?

  They are franchises
• Why is opening a franchise usually less risky than starting as an independent retailer?

  It uses a proven business model
• What advantage does a franchisee have when selling products?

  They sell a well-known product
• What are the key components of a franchise agreement?

  • Franchisee: buys rights to copy business format
  • Franchisor: sells rights to use business idea
  • Joint venture between both parties
• ltd- Companies often need to grow larger than the maximum number of 20 partners allowed in a partnership.

  One way of doing this is to become a limited company. Limited companies have limited liability, meaning an investor only loses the initial stake if a company goes bust.
• The private sector has different types of business ownership. The most common ones are:

  • sole trader
  • partnership
  • private limited company (ltd)
  • public limited company (plc)
  • multinational
  • franchise
• The public sector means the organisations run by government that exist to provide a service for the population and communities.

  Money to pay for these is raised through a variety of taxes, eg:

  • income tax
  • National Insurance
  • VAT
  • air passenger duty
  • fuel duty
• Once this tax is collected it is allocated to various government budgets.

  There are three different levels of government in Scotland:

  • UK Government
  • Scottish Government
  • local government
• The third sector is not about making a profit but rather making a difference to society.

  Third sector organisations are categorised into:

  • charities and community groups
  • social enterprises
• A charity is an organisation set up for a specific cause.

  Charities receive grants from many fund raising organisations such as the National Lottery. Money is also raised for them by sales in charity shops and through public donations.

  All money goes to help the specific cause or to pay for the operation and running of the charity.
• Charities are controlled by elected or appointed trustees. They provide support to the Chief Executive and delegate the day-to-day running of the charity to voluntary staff. However, in smaller charities with few staff, trustees may take hands-on roles too.
• Community groups exist to provide a service for people. They are non-profit making and all of the profit goes back into the organisation to ensure it can keep running.

  Examples of non-profit making organisations are:

  • rugby clubs
  • golf clubs
• A social enterprise is an organisation that exists with a clear goal to help the community but runs the organisation like a business. All profits are reinvested back into the organisation.

  • Social Bite is a chain of retail stores and catering concessions in Scotland which employs a quarter of its workforce from a homeless background.
• What are the factors of production?

  Resources required to produce goods and services
• What are the four factors of production?

  • Land
  • Labour
  • Capital
  • Enterprise
• What does 'land' refer to in the factors of production?

  Natural resources used in production
• Give examples of 'land' as a factor of production.

  Water, oil, fields, or wood
• What does 'labour' mean in the context of production?

  People that work in the business
• Name some examples of 'labour' in production.

  Teachers, joiners, builders, or doctors
• What does 'capital' refer to in the factors of production?

  Money and equipment used in production
• Provide examples of 'capital' as a factor of production.

  Machinery or delivery trucks
• What is meant by 'enterprise' in the factors of production?

  Using resources to make a profit
• Who is an example of someone showing great enterprise?

  Arnold Clark, car business founder
• How do the factors of production interact to create a business?

  They combine resources to generate profit
• Definition of entrepreneurship

  • Entrepreneurship is the process of creating, organising and managing a new business venture, taking on financial risks in the hope of profit.
• Key elements of entrepreneurship

  • Innovation, risk-taking, opportunity recognition, resource mobilization and value creation
• Characteristics of entrepreneurship

  • Successful entrepreneurs often possess characteristics such as creativity, perseverance, leadership problem-solving skills, and a willingness to take calculated risks.
• Types of entrepreneurship

  • There are various types of entrepreneurship, including small businesses entrepreneurship, social entrepreneurship, digital entrepreneurship and corporate entrepreneurship.
• Entrepreneurship is a dynamic and multifaced concept that involves the creation and growth of new business ventures, driven by innovation, risk-taking, and the pursuit of opportunities to create value
• Building a business plan

  Executive Summary- Concisely outline your business concept, objectives, target market, and key financial projections
• Company Overview- Provide a detailed description of your business, including your mission vision and core values
• Market Analysis- Research your industry, competitors and target customers to understand the market landscape and identify opportunity
• Products and Services- Describe your offerings including their features, benefits and unique value proposition.