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Entrepreneurial motives and Characterisitics - Coggle Diagram
Entrepreneurial motives and Characterisitics
Characteristics and skills required
Hardworking
It takes a lot of hard work to turn ideas into practise
Entrepreneurs often have to work long hours
To begin with they may be working alone so they have to do all the different tasks involved in running a business
Accounting
Business Planning
Sales
Marketing
Organised
To keep on top of all the day-to-day tasks of running the business as well as planning for the future
Entrepreneurs may need to be prepared for meetings
Entrepreneurs need to be in control of their finances
Innovative
To come up with new ideas
Think of solutions to problems that come up
Willingness (Risk Taking)
Willingness to take a calculated risk
There lots of unkowns involved in running a business
The entrepreneur will probabl give up their current job and invest money that they could lose if the business fails
They can write a business plan to work out if the business is a good idea
But they don't know excatly what's going to happen before they start
Reasons why people set up businesses
Financial motives
To give the entrepreneur a better quality of life
To exploit a gap in the market
They think of a useful good or service that no other business is providing
Profit Maximisation
A business that ensures that costs never exceeds the revenue is primed to generate a positive cash flow
This in turn creates value for shareholders and presents an attractive proposition for investors
Profit Satisficing
Profit satisficing is a strategy where the managers aim to please the shareholders
They are aiming to satisfy the important people so they get to stay in the job and everybody is happy
It's a way of making life easier in the business and pleasing all stakeholders
Non financial motives
Independance of being your own boss
This means you can decide what to do each day and make decisions on how the business will run
Flexible working hours
Easier to fit work around other commitments like childcare
To follow an interest
A history lover might set up a tour company for a historical site
Being interested in what they do can give a person a lot of job satisfaction
The entrepreneur may be dissatisfied with their current job
Starting up a new business can help the entrepreneur feel happier and more motivated to go to work