1.5.1 Role of entrepreneur

• What is the definition of an entrepreneur?

  A person who sets up a business, taking on the risks of a new business activity with the aim of gaining a reward.
• Why are entrepreneurs important for the economy?

  They create new businesses, widening customer choice and aiding the economy.
• What are the main roles of an entrepreneur?

  • Creating and setting up the business
  • Running and developing a business
  • Bringing innovation to the business
• What does it mean for an entrepreneur to anticipate risk and uncertainties?

  It means they need to consider potential challenges and prepare for them in their business strategy.
• What activities might an entrepreneur have to do before setting up a business?

  1. Identifying a gap in the market and customer needs
  2. Deciding on the marketing mix
  3. Writing a business plan
  4. Conducting market research
  5. Deciding on the ownership type of the business
  6. Setting aims and objectives
  7. Identifying other resources required (e.g., staff/equipment)
  8. Identifying financial requirements
• What must an entrepreneur do to keep a business running after it is set up?

  They must stay up to date with external changes and continue market research.
• How does an entrepreneur update their aims and objectives?

  By monitoring performance and making strategic decisions based on results.
• Why is innovation important for entrepreneurs?

  It helps them stay competitive in the market.
• What is intrapreneurship?

  When an employee shows entrepreneurial skills within a business.
• What are some examples of intrapreneurship?

  • The Swan brand's factory worker suggesting cost-saving ideas.
  • Starbucks' barista introducing the name-writing practice on cups.
• What are some barriers that can prevent business ideas from reaching the market?

  Significant startup costs, lack of money, and lack of confidence.
• How can entrepreneurs overcome the barrier of lack of confidence?

  By portraying a strong belief in their ideas to potential investors and customers.
• What can entrepreneurs do to overcome a lack of training or specialist knowledge?

  They can work in a similar industry, attend business courses, or hire innovative employees.
• What does the saying "The higher the risk, the higher the reward" imply for entrepreneurs?

  It suggests that taking greater risks can lead to greater potential rewards.
• What are some examples of uncertainties that entrepreneurs face?

  • Health scares
  • Political factors
  • Commodity price shocks
  • Changes in exchange rates
  • Changes in legislation
• Why can changes in legislation be costly for a business?

  Because businesses may need to update their processes and procedures to comply with new rules.
• How can changes in commodity prices affect a business?

  They can impact profit margins and production processes.
• How can changes in exchange rates affect UK businesses?

  They can affect the imports and exports of UK businesses.
• What is the importance of conducting market research for entrepreneurs?

  It helps them understand customer needs and minimise risks before launching products.
• Health scares

  Concerns regarding the safety of certain products could impact on profit margins and business' reputations
• Political factors

  Changes to the government could affect taxation, funding, regulations etc that can impact on business' success
• Commodity price shocks

  Changes to the price of items such as oil and gold could impact on profit margins and production processes
• Changes in exchange rates

  Changes to the value of the pound against other currencies could affect the imports and exports of UK businesses
• Changes in legislation

  Any new changes could be costly to a business as they update their processes/procedures to adhere to the rules
• What is one common characteristic of entrepreneurs related to decision-making?

  Initiative: Able to analyse situations and make decisions without direction from others.
• What does it mean for an entrepreneur to be hardworking?

  Prepared to work all hours including day/night/weekends and with little support from others.
• Why is creativity important for an entrepreneur?

  It allows them to think of new ideas and opportunities to take advantage of, continuing beyond the first few years.
• What is a key trait of self-confidence in entrepreneurs?

  Need to believe in their own abilities, judgement and their overall business idea.
• What does it mean for an entrepreneur to be a risk taker?

  Be willing to try new things even if there is no guarantee of a positive outcome.
• How does resilience benefit an entrepreneur?

  It allows them to keep going and stay optimistic even if things are not going well.
• What is the difference between characteristics and skills in entrepreneurship?

  Characteristics are usually natural traits, while skills are things a person can learn to do better through practice.
• What are the specific skills needed by entrepreneurs?

  • Team working
  • Communication
  • Problem solving
  • Numeracy
  • Organisation
  • IT skills
• Why is team working important for entrepreneurs?

  It allows them to share responsibilities, consider opinions of others, and be reliable.
• What are key aspects of effective communication for entrepreneurs?

  Conveying messages correctly in a confident, concise, and polite manner to a range of people.
• What does problem solving involve for an entrepreneur?

  Clearly identifying problems, assessing different solutions, and putting a plan into action.
• Why is numeracy important for entrepreneurs?

  It helps them work out costs and revenues, make accurate profit forecasts, and make accurate sales forecasts.
• What role does organisation play in entrepreneurship?

  It involves the day-to-day running of the business, monitoring overall performance, and planning strategies for the future.
• Why are IT skills important for entrepreneurs?

  They are crucial for market research, communication, and promoting the business, especially when starting with fewer staff.
• What are the financial motives for setting up a business?

  • To earn enough money to support themselves
  • To earn more than they could in employment
  • Profit Maximisation
  • Profit Satisfying
• What is profit maximisation?

  Making as much profit as possible by minimising costs and maximising revenues.