152 Entrepreneurial Motives and Characteristics AS Edexcel New Specification 2015 Business By Mrs Hilton for

From the specification a) Characteristics and skills required b) Reasons why people set up businesses: financial motives: profit maximisation profit satisficing non-financial motives: ethical stance social entrepreneurship independence home working a) Characteristics and skills required b) Reasons why people set up businesses: financial motives: profit maximisation profit satisficing non-financial motives: ethical stance social entrepreneurship independence home working

Guidance from Edexcel

Lesson Objectives To be able to identify the characteristics and skills required to be an entrepreneur To be able to discuss financial and non financial motives for starting a business To be able to answer sample exam questions based on the topic area

Starter Do you have the right skills to start a business? Who wants to start their own business? Take the quizquiz

CHARACTERISTIC'S AND SKILLS REQUIRED

Definition of entrepreneur 4 Factors of production: Land – Can mean actual land or natural resources Labour – The employees or workers Capital – Finance invested in the business also means tools and equipment Enterprise – Role of the entrepreneur is to bring together the other 3 to make a profit

Are you creative? Wedgewelly – as worn by celebs! welly.co.uk/ welly.co.uk/ Watch their original pitch to the Dragons Den here: uk/dragonsden/entr epreneurs/lauraboo th.shtml uk/dragonsden/entr epreneurs/lauraboo th.shtml

Are you hardworking? Entrepreneurs may have to put many hours in at the start of a business. Nicki Bromfield started Cake Hole in a village in Tutbury. She is in her 3 rd year at the shop and works on her own. She is currently working 120 hours a week to make a go of the business. Examples of her cakes: akes/celebration-cakes/ akes/celebration-cakes/

Are you Resilient? Resilient: strong, hardy, tough, robust, durable, feisty, quick to recover. An entrepreneur may get many knock backs before their business is a success. Karen Jonga started her own dressmaking business in Derby. At the start many people told her that it would not be a success. She had many problems along the way – but by having resilience she has been able to keep the business going. “If you get knocked down you get up again.” Karen Tino Jonga 24, is a UK Fashion Designer/Dressmaker with a unique & timeless approach to creating women’s wear. co.uk/#/studio- gallery/

Do you have Initiative? Initiative: inventiveness, enterprise, ingenuity, resourcefulness. Many entrepreneurs may start a business because they have a good idea and want to take it to market. sden/entrepreneurs/richardbla kesley.shtml sden/entrepreneurs/richardbla kesley.shtml Watch the wand company present in the den. Here is the website: any.com/sonic/ Now they have developed a sonic screwdriver for Dr Who fans!

Do you have Self confidence? Levis roots and reggae reggae sauce – watch his self confidence win him some investors… onsden/entrepreneurs/levir oots.shtml onsden/entrepreneurs/levir oots.shtml His website is here:

Are you a Risk taker? Risk; danger, jeopardy, peril, hazard, menace, threat. Many entrepreneurs stake everything on their idea and may lose personal possessions in their quest to start their own business. Kirsty Henshaw a single mum had everything to lose with her dairy free ice cream: n/entrepreneurs/kirstyhenshaw.s html n/entrepreneurs/kirstyhenshaw.s html

MOTIVES FOR STARTING A BUSINESS

Question: What do you already know... What reasons might people have for starting their own business?

How did we do? Want to be their own boss Want to earn their own money / profit Want to start a business for a social reason Want to start a business to have something to hand over to their children Wanting to work in a more ethical way Wanting flexibility in hours or location

FINANCIAL MOTIVES FOR STARTING A BUSINESS

profit maximisation An entrepreneur may aim to make the highest amount of profit possible This is the difference between revenue and costs, so they will seek to minimise costs and maximise revenue The advantages to a sole trader are larger wages can be drawn from the profit The advantages for a ltd company and a plc is dividends will be larger on shares Share price will increase for a plc and this will attract investors Article here on Amazon’s profitshere

profit satisficing An entrepreneur may aim to make just enough profit to keep the business moving plus another aim at the same time For example a business may want to make a profit and: – Reward employees with higher wages – Invest in environmental project – Serve the community in some way Quick cartoon herehere Profit satisficing may be a more realistic goal where managers are trying to satisfy diverse range of stakeholders – consumers, workers and shareholders etc. This may be seen in the cases of small haulage & coach operators who aim to survive. Taken from A Level paper mark scheme evaluation

NON-FINANCIAL MOTIVES

Want to be their own boss Advantages: Can work on own – no one to answer to Can have own idea and run with it – do not have to follow an old idea Autonomy Being the boss, sense of pride and achievement Task investigate articles on this website

ethical stance Some businesses may decide to trade in a more ethical way For example: – Environmental trading at their heart e.g. Starbucks Starbucks – Animal rights e.g. Body ShopBody Shop – Fair wages for workers in African nations e.g. Fairtrade productsFairtrade – Organic, anti-GM crops Organic – Ethics e.g. Ethical superstoresuperstore

What kinds of businesses work from home? Circle those you think could work from home… Plumber Electrician Hairdresser Joiner Jewellery maker Curtain maker Nail technician Bee keeper / honey producer Accountant Computer technician Website designer

Advantages of working from home 1.Fit a business round a family, gives a good work-life balance 2.The owner can work hours that suit their lifestyle 3.No commute, so reduction in costs of travelling 4.No expensive premises to pay for, so a reduction in fixed costs 5.Less stress from travelling and tension with colleagues

Disadvantages of working from home 1.No socialisation with other workers, so business owner may not have anyone to bounce ideas off 2.Work is all around the business person so they may find it hard to switch off 3.The business owner may find that they work more hours than a regular job as they don’t keep track of the time that they work 4.Needs lots of self discipline to avoid distractions 5.Too easy to be lazy and not work

To be more flexible on location or hours This owner chose her location as it was close to the drop off bus stop for her children after school

Social enterprise reasons (it’s not just about £££) What is social enterprise? Over to you In teams find out about: Divine chocolate Jamie Oliver Fifteen Big Issue Cafe Direct Eden project

What is social enterprise? Social enterprises are businesses trading for social and environmental purposes. – (Learn that bit) Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social and/or environmental purpose is absolutely central to what they do. – their profits are reinvested to sustain and further their mission for positive change.

Jamie Oliver 15 video

Benefits of not-for-profit social enterprise 1.Entrepreneurs can earn a living doing something valuable which can be motivating 2.The more successful the social enterprise the more society benefits 3.Customers may be more willing to buy from a social enterprise

Where is this? Have you ever been there? Why is it a Social Enterprise?

Eden Project – social enterprise The Eden Project in Cornwall has been built in a disused clay mine, transforming it into a rich, global garden where people can learn about nature and get inspiration about the world around them. Eden is an educational charity and social enterprise and much of their energy goes into: –Running social and environmental projects in Cornwall and around the world –creating unforgettable learning experiences for students –putting on fantastic arts, theatre and music events –creating stunning gardens as well as doing valuable research into plants and conservation –making sure we run our operations in the greenest possible way. Article here Eden Project currently making a losshere

What do you think of the Big Issue? Have you ever read it? Did you know it was a social enterprise? Video

Why is it a social enterprise and not a charity? The Big Issue is a business solution to a social problem, demonstrating that an organisation can succeed whilst being simultaneously driven by commercial aims and social objectives. It has helped thousands of individuals to regain control of their lives and has simultaneously altered public perceptions of homeless people.

Examples of social enterprise Great case study here to print out about Francesca Barker who rehabilitates those who have come out of prison, in her bakeryhere Ben and Jerry’s supplier of chocolate brownies for their ice cream – a social enterprise video here and here here

Definitions from Edexcel Characteristics an entrepreneurial characteristic is the personal skill or quality or trait Motivations entrepreneurial motive is the purpose/what drives a person

Can you complete the table? Profit reasons for starting a business Non-profit reasons for starting a business Ethical reasons for starting a business

Profit reasons for starting a business Non-profit reasons for starting a business Ethical reasons for starting a business Want to make more money than at current job Want to start a business as a legacy for children to take over Want to help others e.g. fair trade / ethical trading Want to earn more than minimum wage Want flexibility and work life balance Want to make a difference to the planet – eco-friendly Want to be self employedWant control in their life, and to be independent, and to be more creative Want to start a business for the benefit of others e.g. community cafe Want earnings to be unlimited Want to be their own boss – don’t want to be ordered around Want to give something back to society

Motivations are NOT characteristics CharacteristicsMotivations

Motivations are NOT characteristics Characteristics Resilient Hard-working Determined Creative Self confident Lots of self initiative Risk taker Motivations To be own boss For social reasons (to help the community) To make a profit To have more control over working life To turn a hobby into a revenue generator Increase income Become independent Driven by personal passion To sell something new

Sample question 1 4 marks – case study on next slide Knowledge 1 Application 2 Analysis 1

Salt pipes?

Answer question 1

Sample question 2 6 Marks, case study on next slide 3 marks for characteristics and 3 marks for motives (1 knowledge, 1 application, 1 analysis)

Answer question 2

Sample question 3 6 marks Case study on next slide 3 for characteristics 3 for motives

Answer question 3

Revision Video

Glossary profit maximisation; the aim of the business is to make as high profits as is possible in the time frame profit satisficing; the aim of the business is to make just enough profit to satisfy the owners but with other managers objectives ethical stance; to trade in a way that is respectful of people, animals, or the environment. social entrepreneurship; to trade with the goal of helping the community in some way Independence; to trade in a way which meets the entrepreneur's own goals and allows them to be their own boss home working; to work from home, for example an eBay business