Describes the role of an entrepreneur (setting up a business, innovation, etc.), barriers to entrepreneurs, skills and characteristics of entrepreneurs, risk and rewards, and opportunity cost.
Theme 1 Topic 1
Entrepreneurs
Role of an entrepreneur
Entrepreneur – an individual who takes the risk to start up a new business idea or project.
Enterprise skills – the skill required by a businessperson that involves risk taking and creativity.
Intrapreneurship – the act of behaving like an entrepreneur while working within a large organisation.
Intrapreneurship is known as a management style that integrates risk-taking and innovation e.g. Steve Jobs
decided to launch a phone when he was CEO of Apple.
Creating and setting up a business Running, expanding, developing the business
This could be generating ideas or spotting a business The entrepreneur will need to ensure adequate
opportunity, then acting upon it by raising the staffing is in place through careful recruitment and
finance and establishing the business. training.
Use of techniques such as market research and Expansion may be possible if demand is high and
market mapping can help assess the opportunities this must be carefully financed.
available. More outlets means delegation of authority to more
managers may be essential.
Innovation Anticipating risk and uncertainty
Entrepreneurs need to come up with new ideas that Reaction to changing market conditions is crucial for
can be exploited. An intrapreneur does this in an survival.
existing business, e.g. Google staff are encouraged New Look decided to pull out of Russia in 2014 just
to innovate constantly. before the economy collapsed. Good entrepreneurs
anticipate risk and react quickly.
Barriers to entrepreneurship
Factors making it difficult for entrepreneurs to succeed:
Lack of access to finance, e.g. with no track credit history banks will not usually lend to high risk start-
ups.
Lack of experience/know how. Many entrepreneurs have not dealt with large suppliers before or even
realise that trade credit is possible. As a result, cash flow problems could be possible.
Many entrepreneurs fail to understand the importance of market research and as a result fail to
understand consumer tastes and requirements as much as their rivals.
The business owner themselves may lack the creativity and entrepreneurial qualities to make the
business a success, e.g. a new café in Huddersfield would need to offer something better for
customers to take customers away from established rivals like Costa and Café Nero.
Skills and characteristics required to be a successful entrepreneur
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