1.5 Entrepreneurs and leaders 1.5.1 Role of an entrepreneur Theme 1: Marketing and people What do these people all have in common? Who are they? 1.5 Entrepreneurs and leaders 1.5.1 Role of an entrepreneur Edexcel Business

1.5.1 Role of an entrepreneur In this topic you will learn about Creating and setting up a business Running and expanding/developing a business Innovation within a business (Intrapreneurship) Barriers to entrepreneurship Anticipating risk and uncertainty in the business environment

Creating and setting up a business What is an Entrepreneur? A person who spots an opportunity and shows initiative and a willingness to take risks in order to benefit from the potential rewards Where do ideas come from? Brainstorming Personal experience Business experience Market research Where did Simon Lee get the inspiration for his translation business from? http://www.bbc.co.uk/news/business-33161899 How doing homework for friends inspired a global company

Creating and setting up a business Creating and setting up a business will involve a number of steps including: Generating an idea Asking if the idea can add value Conducting market research Drawing up a business plan Deciding on legal structure Raising finance http://www.bbc.co.uk/news/business-33161899 How doing homework for friends inspired a global company

Purpose of Business plans To try to secure external funding To measure performance against forecasted performance To have a target/objectives to work towards and how to get there

What do you think should go into a business plan? The executive summary - a synopsis of the entire plan looking at the most important points The business and products or services The market e.g. size, share, competitors The marketing strategy The skills of the entrepreneur and other key employees Operations Financial forecasts

Running and expanding/developing a business The entrepreneur is often also the hands on person making daily decisions, at least in the early years This involves: Managing resources including stocks, personnel and finances Making marketing decisions about aspects of the marketing mix such as what price to charge and how to promote the business Dealing with customers Maintaining financial records

Running and expanding/developing a business As the business grows the entrepreneur may need to change roles: Employ staff Use the services of experts e.g. an accountant Delegate responsibility to others And make other key decisions: Move to bigger premises Change suppliers Expand product range What are the issues facing a rapidly expanding ? http://www.bbc.co.uk/news/business-33309221 Janine Allis: From Bowie's barmaid to $230m businesswoman Why might an entrepreneur find it hard to delegate?

Innovation within business The characteristics of an entrepreneur include: Creative and innovative Enthusiastic and motivated Good communication skills Why are these also characteristics a business would look for in an employee? Intrapreneurship is when employees in a larger organisation act in the same way as entrepreneurs Entrepreneur research task Entrepreneurship and intrapreneurship. http://www.inc.com/murray-newlands/10-things-entrepreneurs-need-to-know-about-intrapreneurship.html 10 Things Entrepreneurs Need to Know about Intrapreneurship

Barriers to entrepreneurship Would you want to be an entrepreneur? Why is everyone not an entrepreneur? Not everyone wants to be an entrepreneur – comfortable working for others Lack of access to finance Knowledge and know how Risk-averse Lack confidence Limited skills Or is it just not having an idea? http://www.bbc.co.uk/news/business-23157638 Are entrepreneurs born or can they be taught? Are entrepreneurs born or can they be taught?

Risk and uncertainty Both risk and uncertainty deal with unknowns Risks It is possible to add a probability to quantify the degree of risk i.e. t is measurable Uncertainties It is not possible to add a quantifiable probability as the outcome is too unpredictable i.e. it is not measurable Entrepreneurs have to anticipate both risks and uncertainties in the business environment

Risk and uncertainty Risks Uncertainties Can be anticipated by entrepreneurs: Market research Understanding of the industry Assessing own personal potential losses Business plans Uncertainties Are harder to anticipate as outside of the entrepreneur's control: Keep up to date with current business climate e.g. economic and political changes Make plans for unexpected events (contingency plans) Spread risk e.g. a number of products or suppliers

Risk and uncertainty What are the risks of being an entrepreneur? What are the rewards of being an entrepreneur? Do the risks outweigh the rewards or vice versa? Is risk a good or a bad thing? Are you a risk taker or risk-averse? Risks Rewards Financial Money Invested Salary foregone Esteem Fear of failure Proving self Commitment Time and effort Loss of personal/social time Profit motive Return on Investment Future security Being own boss Taking decisions Not taking orders! Self actualisation Self satisfaction Achievement

Test your self - 10 minutes What is meant by the term entrepreneur? State one source of business idea. State one purpose of a business plan. Briefly explain why a business may look for intrapreneurship in employees. Explain one barrier to entrepreneurship. State one way in which an entrepreneur may be able to identify risk. With reference to an entrepreneur explain what is meant by the term uncertainty. End

1.5.1 Role of an entrepreneur In this topic you have learnt about Creating and setting up a business Running and expanding/developing a business Innovation within a business (Intrapreneurship) Barriers to entrepreneurship Anticipating risk and uncertainty in the business environment