Enterprise

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Icons key: For more detailed instructions, see the Getting Started presentation

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Enterprise

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What is the meaning of the terms enterprise and entrepreneur?What are the main reasons for setting up a business? What are the key characteristics required to become a successful entrepreneur?Why do businesses fail?Why is enterprise important to the economy and what are the main sources of government support?

Learning objectives

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Business brains

An entrepreneur is an individual who sets up a new business and has the skills needed to make it a success. Their drive to work for themselves is known as entrepreneurial spirit.

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Entrepreneurs and enterprise

Entrepreneur is a term we hear often, but what do entrepreneurs do?

What does entrepreneur and enterprise mean?Why do people set up their own businesses, rather

than work for another firm?

Some people set up a business on their own after being employed by another company, whereas others might start a new business as soon as they leave school or college.

Entrepreneurial activity is called enterprise; being an entrepreneur is about having the desire and skills to set up a business.

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Non-financial start-up objectives

People may start up businesses for non-financial reasons.

to pursue a hobby or personal interestto have contact with other peopleto do something challengingto achieve a social or environmental aim.

These could include:

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Benefits of starting up a business

What other benefits are there of owning a business?

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Disadvantages of starting a business

having to acquire all of the skills necessary to run a business such as book-keeping, knowledge of consumers and employment lawhaving to take full responsibility for decision-making

Starting up and running a successful business is not easy, some of the most common problems encountered include:

having to work long hours, perhaps over the weekend, and taking few holidayshaving to accept a much lower income, or even none at all, until the business begins to make a profit.

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• Make a table to display 3 advantages and 3 disadvantages of starting your own business.

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THE DRAGON’S DEN

Watch video then page 13. What skills does Levi have? then video 2.

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Entrepreneurial skills

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Taking calculated risks

Businesses face risks at all times, but the riskiest stage is usually at start-up. Around one third of all new businesses fail within the first three years.

Why is it impossible to avoid taking risks when running your own business?

Entrepreneurs have to take decisions that not only risk their own money and reputations but also those of others, such as other investors and lenders.

Taking a calculated risk involves weighing up the potential negative consequences of a decision with the rewards that could occur if the decision is a good one.

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BUSINESS IDEAS

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The process of creative thinking

Creative thinking is a valuable skill for anyone setting up and running a new business. It involves looking at an existing situation and assessing its strengths and weaknesses in order to identify possible new approaches.

Think of a relatively new product, such as the iPhone. Why is it a good example of creative thinking?

This may result in ideas for new products which satisfy customer needs more effectively.

Entrepreneurs who can think creatively are likely to be more successful than those who rely on existing methods.

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http://www.bbc.co.uk/news/technology-21796888

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Protecting new ideas

New product ideas need to be protected from competitors if a new business is to be successful.

Trademarks for business or product names, logos and symbols can also be registered at the Patent Office for exclusive use.

A business that wants to protect its new product designs can apply for a patent. This can prevent other firms from copying it for up to twenty years.

The main drawback for new businesses is that the fees charged by the Patent Office can be quite high, adding to costs.

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• Why is it important to be creative?

• How can we protect our creativity?

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Why do new businesses fail?

lack of market research

In 2009, around 36,000 companies in the UK were predicted to fail; many of these would not even survive their first year of trading.

Some common reasons why new businesses fail include:

Can you identify two more possible reasons for business failure?

worsening economic conditions.

poor cash flow management

inadequate planning

insufficient finance

failing to accurately estimate or control costs

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Who wants to be an A* student?

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Glossary