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CHAPTER 4 ENTERPRISE. Enterprise. Enterprise involves using your initiative to identify a need and then taking steps to satisfy it. It involves taking financial and personal risks .
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Enterprise • Enterprise involves using your initiative to identify a need and then taking steps to satisfy it. • It involves taking financial and personal risks. • The human ability to be innovative and willing to do something new and challenging with the risk of possible failure.
Entrepreneur • A person who has an idea or identifies an opportunity, who uses their initiative to set up a new business, invests their time and takes a risk in order to make a return. • Entrepreneurs are ‘Proactive’, as they anticipate what the market needs will be in the future and do something about it. As opposed to being ‘Reactive’ and waiting for things to happen.
Why become an Entrepreneur • Own Boss • Keep the profits • Develop your own business idea • Create employment • Challenge/Satisfaction
Influencing Factors for Entrepreneurs • Growing wealth and confidence in company. • Education; more skills and qualifications • Emigration and travel; more open-minded and new opportunities. • Financial services; banks etc more willing to lend money. • Government: Various grants available
Factors of Production • An entrepreneur brings together the four factors of production: • Land (Raw Materials) • Labour (Workers) • Capital (Finance) • Enterprise (Ideas)
Characteristics of Entrepreneurs (PISSNRR) • Special attributes or traits that distinguish one person from another. Something you are born with. • Pro-Active--taking positive steps to reach goals and take initiative. • Independent-like to be in charge and give orders. • Self-motivated-push themselves to achieve, don’t need to be inspired • Self-belief--‐believe in their idea and don’t allow themselves to be put off by others. They don’t give up after setbacks • Need for achievement-want to be a success. • Risk taker-not afraid of taking chances and take sensible risks. • Ruthless-put their business first and make decisions that are best for it.
Skills of Entrepreneurs (1) • Abilities people have gained through practice, knowledge, education and experience. • Home-Parents converting attic into study for daughter. • Community-Neighbours set up committee to enter Tidy Towns.
Skills of Entrepreneurs (2) • Human Relations • They are good with people and can bring out the best in them • HOME-Persuade a bank manager to give them the loan. • COMMUNITY-Persuade as many people as possible to join team. • Time Management • Able to complete all tasks they need to achieve their goals in time available. • It involves: Writing down tasks, working out time available and prioritising. • HOME-Draw up schedule to ensure attic is done before 6th year. • COMMUNITY-Draw up schedule to ensure town is tidied before judges come.
Skills of Entrepreneurs (3) • Planning • Set goals for future and come up with strategies to achieve them. • HOME-Prepare cash flow forecast to see whether they have enough money. • COMMUNITY-Use manpower planning to figure out how many volunteers needed. • Risk Management • Identify all risks: commercial, financial and physical. • Take measures to minimise their impact on business. • HOME-Take out payment protection insurance on loan so that it can be repaid should they lose their jobs. • COMMUNITY-Take out public liability insurance so that injured people will be compensated.
Skills of Entrepreneurs (4) • Decision Making • Chose best solution to problem or opportunity. • Analyse it, list all solutions, go through advantages and disadvantages of each one and pick the best solution. • HOME-Parents research various builders and chose best one. • COMMUNITY-Decide who does what job and when to clean up. • Reality Perception • See things as they really are and don’t fool themselves into thinking they are succeeding when in fact they are not. • HOME-Parents confront builder when they realise he isn’t doing well • COMMUNITY-They realise that not enough people are volunteering and go on massive recruitment drive
Intrapreneur • An employee working within in a business who shows enterprise and thinks of idea to help business. • They do not take as big of a risk as entrepreneurs. • Microsoft workers thought of bringing out XBOX after seeing success of Sony’s Playstation. • Art Fry in 3M came up with idea to use the special glue that they had invented to make Post-Its.
Importance of Enterprise in Business • Provides the idea and drive to start business in first place. • Intrapreneurshipcan help business increase sales. • Entrepreneurs spend more money in other business and leads to creation of more business. • Taxes the government receive can be used to provide grants and help new entrepreneurs.
Importance of Enterprise in Community • Enterprise creates jobs for local people and gives higher standard of living e.gGreencapsporter service in Ballymun. • Helps other businesses to succeed. • It creates new breed of entrepreneurs. • Government can use taxes to spend on education, hospitals etc. • Infrastructure of local area improves.
Reasons for Growth of Enterprise in Ireland • Govt Incentives and Assistance • Knowledge of Enterprise Skills • Need for local businesses to supply raw materials to multi-nationals. • Education System. • New Technology. • Educated Workforce. • Cultural Change.
