Enterprise and business growth

• Entrepreneur


  A person who is willing and able to create a new business idea or invention and takes risks in pursuing success
• Successful entrepreneurs


  • Can identify and pursue opportunities
  • Create value for customers
  • Build thriving businesses
• What entrepreneurs do

  1. Organise resources

  2. Make business decisions

  3. Take risks
• Organise resources


  An entrepreneur must be able to gather and coordinate the resources necessary to start and operate a business
• Organising resources


  • When Michael Dell started his computer company from his garage, he had to organise resources such as space, computers, software tools, employees, and manage the finances
• Make business decisions

  Entrepreneurs must be able to make decisions that will determine the success or failure of their business
• Business decisions

  • A restaurant owner may need to decide what type of food to serve, where to locate the restaurant, and what prices to charge
• Take risks

  Entrepreneurship involves taking risks - financial, personal, or professional
• Taking risks

  • An entrepreneur may invest their life savings into a new venture or quit a secure job to start their own business
  • They may also take risks by introducing new products or entering new markets
• Skills required by entrepreneurs

  • Communication
  • Team working
  • Problem solving
  • Organisation
  • Numeracy
  • Information technology
• Characteristics of successful entrepreneurs

  • Creativity
  • Hard working
  • Resilience
  • Initiative
  • Self confidence
  • Risk taker
• Risk taker

  Entrepreneurs take risks - financial, personal, or professional
• Decision maker

  Entrepreneurs must be able to make decisions that will determine the success or failure of their business
• Organised

  An entrepreneur must be able to gather and coordinate the resources necessary to start and operate a business
• Creative

  Developing new solutions to solve existing or emerging problems is a key entrepreneurial role that helps a business stand out from rivals and achieve success
• Great communicator

  Entrepreneurs need to be persuasive communicators. Persuading lenders, investors and customers to support their business is central to achieving financial success
• Independent


  Starting a business is often the sole responsibility of a single entrepreneur, who will need to be able to solve problems with limited support
• The main aim of producing a business plan is to reduce the risk associated with starting a new business
• Elements of a business plan

  • The business idea
  • Business aims & objectives
  • Target market
  • Forecast revenue
  • Forecast costs
  • Profit forecasts
  • Marketing mix
  • Cash-flow forecast
  • Sources of finance
  • Business location
• The business idea

  A clear explanation of the goods or services provided by the business which will help to attract investors
• Business aims & objectives

  What the business wants to achieve in the medium and long term. These aims may be both financial and non-financial depending on the business
• Target market


  This section will discuss who the business is aimed at e.g. age, gender, income and will form part of the firms marketing strategy
• Forecast revenue


  This will project how much income the business plans to make through sales. Sales Revenue = Price x Quantity Sold
• Forecast costs

  Firms need to forecast their fixed, variable and total costs in order to manage their spending
• Profit forecasts

  Investors will be interested to see the firms profit forecasts to see whether the business will have the ability to pay back loaned funds e.g. bank
• Marketing mix

  Provides an explanation of the firms marketing strategy for the product/service which will outline how the firm plans to attract customers. This includes Product, Place, Price and Promotion
• Cash-flow forecast


  This explains how the firm plans to manage its inflows and outflows of cash on a monthly basis in order to avoid liquidity problems
• Sources of finance

  This section will show the sources of finance used to fund the new business e.g. loans, owners funds or venture capital
• Business location

  The location of the business will be proposed including a map along with an explanation of potential advantages such as transport links or proximity to customers
• Having carried out research to support the plan, the business will be well-informed about the potential problems and chance of success and can select the most appropriate source of finance based on this information
• A well-written business plan can help a business to obtain finance
• Lenders (e.g. banks) and other investors will be able to explore the plan and make an informed decision about whether the business is credible and worth the financial risk
• Investors (e.g. venture capitalists) will use the business plan to explore whether there is an opportunity to increase the value of their investment and make a worthwhile profit
• A clear action plan provides direction for the business and helps lenders and investors to have confidence in the future success of the business
• Most high street banks can provide a detailed template for business owners to complete when applying for finance
• Reasons for governments to provide support to entrepreneurs

  • Increase the country's level of output to achieve economic growth
  • Reduce the level of unemployment as new or growing businesses create jobs
  • Improve choice for consumers by providing competition for existing businesses
  • Encourage entrepreneurs to set up social enterprises which may support disadvantaged groups or improve communities
• How governments support business start-ups

  • Training and support sessions
  • Enterprise zones
  • Finance
• Training and support sessions

  Advice regarding finance, operations and marketing can often be accessed through local authorities. Support sessions offered by business mentors allow entrepreneurs to ask specific questions related to their business
• Enterprise zones

  Geographic areas which provide tax breaks and government support to help businesses grow. They can provide access to low-cost premises and incentives such as reduced business rates. They are often linked with universities who share expertise and facilities, especially in less economically-developed regions
• Finance


  Some governments provide low-interest start-up loans and grants for new or growing businesses that create jobs or invest in training workers