1.5.2 entrepreneurial motives + characteristics

• profit reasons for starting a business

  • can earn a living doing something valuable making more money than at current job
  • want to earn more than minimum wage
  • want to be self-employed
  • want unlimited earnings
• non-profit reasons for starting a business

  • want to be your own boss
  • flexibility in hours or location
  • working from home
  • serve a community
• ethical reasons to start a business

  • can have an increase in sales as well as supporting the environment - organic, GM crops
  • environmental reasons
  • fair wages
  • organic food
• characteristics

  an entrepreneurial characteristic is the personal skill, quality or trait
• motivations

  entrepreneurial motive is the purpose/what drives a person
• characteristics of an entrepreneur

  creativity, hardworking, resilience, initiative, risk taking, opportunity spotter
• motives for starting a business

  • want to be their own boss
  • want to earn own money/profit
  • to have something to handover to children
• financial motives - profit maximisation

  • aim to make highest profit amount possible
  • this is difference between revenue and costs
  • share piece will increase for a plc and will attract investors
• financial motives - profit satisfying

  an entrepreneur may aim to make just enough profit and another aim at the same time

  for example, as business wants to make profit and:

  • reward employees with higher wages
  • invest in environment project
  • serve the community in some way
• non financial motives

  be your own boss

  advantages:

  • work on own
  • make own ideas
  • autonomy
  • sense of pride and achievement

  disadvantages:

  • large workload
  • lack of experiencal support
  • wage based on profit
• non financial motives

  working from home

  advantages:

  • fit around family work-life balance
  • work hours suiting their lifestyle
  • no expensive premises to pay for
  • less stress

  disadvantages:

  • no socialisation with workers
  • hard to switch off
  • owners may work more hours than a regular job
  • need self-discipline to avoid distractions
• further non financial motives

  ethical stance:

  some may decide to trade in multiple ethical ways. for example:

  • environmental trading at their heart eg, starbucks
  • animal rights eg, body shop
  • fair wages for african women eg, fairtrade products
  • organic, anti GM crops
  • ethics eg, ethical superstore
• what is a social enterprise

  • business trading for social and environmental purposes
  • are distinctive because their social and for environmental purpose is absolutely central to what they do
  • = profits are invested to sustain and further their mission for positive change
• benefits of not-for-profit social enterprise

  • entrepreneurs can earn a living doing something valuable which can be motivating
  • the more successful the social enterprise the more society benefits
  • customers may be more willing to buy from a social enterprise
• why is it a social enterprise and not charity?

  • social enterprise make money by selling a product to make money
  • social enterprise can register in multiple different ways
  • charities rely on donations
  • in the uk, charities must be registered on the charity commission