Entrepreneur
Is a person who organizes, operates a business and takes the risk for a new business adventure.
Benefits:
- independence - able to make decisions of how to use time and money
- able to put own ideas into practical
- might become famous and successful if the business grows
- earn lots of profit, better than working for another business.
Disadvantages:
- risk - many new entrepreneurs' fail because of poor planning
- entrepreneurs will have to put their own money to their business
- lack of knowledge and experience
- opportunity cost - lost income from not being an employee of another businesses
Is a person who organizes, operates a business and takes the risk for a new business adventure.
Benefits:
- independence - able to make decisions of how to use time and money
- able to put own ideas into practical
- might become famous and successful if the business grows
- earn lots of profit, better than working for another business.
Disadvantages:
- risk - many new entrepreneurs' fail because of poor planning
- entrepreneurs will have to put their own money to their business
- lack of knowledge and experience
- opportunity cost - lost income from not being an employee of another businesses
Characteristics of successful entrepreneurs:
- hard working
- risk taker
- creative
- optimistic
- self-confident
- innovative
- independent
- effective communicator
- hard working
- risk taker
- creative
- optimistic
- self-confident
- innovative
- independent
- effective communicator
Business plan is a document containing business objectives and important details about the operations, finance and owners of the new business.
Capital employed is the total value of capital used in the business.
Comparing the size of businesses:
Comparing the size of businesses:
- Investors - before deciding which business to put their money into.
- Governments - often there are different tax rates for small and large businesses.
- Competitors - to compare their size and importance.
- Workers - to have some ideas of how many people they work with.
- Banks - to see how important a loan is.
- number of employees
- value of output
- value of sales
- value of capital employed
Internal growth occurs when a business expands its existing operations.
External growth is when a business takes over or merges with anoher company or business.
Merger is when the owners of two businesses agree to join together to make one business.
A takeover or acquisition is when one business buys out the owners of the other business.
Horizontal integration is when one business merges with another one in the same industry at the same stage of production.
Vertical integration is when one business merges with another one in the same industry but at a different stage of production.
Conglomerate integration is when one business merges with a business in a completely different industry.
Why do some businesses stay small?
- The type of industry the business operates in
- The market size
- The owners's plan
- Poor management
- Failure to plan for changes
- Poor financial management
- Over-expansion
- Risks of new business start-ups
