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The Role of The Entrepreneur Summary

The document discusses the role of entrepreneurs. It describes entrepreneurs as individuals who start businesses by creating firms, raising capital, owning assets, and employing workers. Their success comes from seeking new market opportunities and identifying customer needs. While entrepreneurs take on high risks of business failure and unlimited liability, they can gain rewards like profit withdrawals, leisure time, and job security. Becoming an entrepreneur means losing wages from regular jobs, leisure time spent running the business, and interest income from savings used for startup costs. The reasons one may choose to be an entrepreneur include being their own boss, higher satisfaction levels, flexibility, escaping racial prejudice, and having an alternative source of income if their job is lost. The document concludes by discussing whether governments should

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Ezra Hutahayan
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77 views3 pages

The Role of The Entrepreneur Summary

The document discusses the role of entrepreneurs. It describes entrepreneurs as individuals who start businesses by creating firms, raising capital, owning assets, and employing workers. Their success comes from seeking new market opportunities and identifying customer needs. While entrepreneurs take on high risks of business failure and unlimited liability, they can gain rewards like profit withdrawals, leisure time, and job security. Becoming an entrepreneur means losing wages from regular jobs, leisure time spent running the business, and interest income from savings used for startup costs. The reasons one may choose to be an entrepreneur include being their own boss, higher satisfaction levels, flexibility, escaping racial prejudice, and having an alternative source of income if their job is lost. The document concludes by discussing whether governments should

Uploaded by

Ezra Hutahayan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

The Role of the Entrepreneur Summary

● Background of Entrepreneurs:

Individuals setting up a business

Have to create a firm, raise capital, own an asset and employ workforce

● The Success of Entrepreneurs:

The success of entrepreneurs generally are reached through:

1. Seeking for new opportunities in the market

2. Identifying the needs and wants of customers

● Risks and Rewards:

Risks Rewards

1. High risks -> Possibilities of failing and 1. Not rewarded with wages -> Freedom
not earning profit in withdrawing the firm’s profit

2. Unlimited liability -> Owner’s assets 2. More leisure time


are at risks
3. Higher job security

● Opportunity Costs:

The next best alternative foregone when choosing a particular decision

1. Lost Wages:
Dismissing for regular 9-5 employment will reduce their wage for start-up cost

Some entrepreneurs have a job and create a firm as a passive income and dismiss themselves
after the business has operated -> Moonlighting

2. Lost Leisure Time:


Opportunity cost of creating a business is losing time to control the business

E.g.: Phil Lahin (Evernote Creator) had difficulties for work-life balance

3. Lost Interest Income:


High risks of money for start-up cost -> Losing funds from savings (Source of finance)
● Why Become an Entrepreneur?

1. Superiority -> Becoming a boss with no restrictions as employees have to follow


corporate culture

2. Higher satisfactory level (Global Entrepreneurship Monitor, 2013).

3. Flexibility in regards to working hours

4. Escape racial prejudice in the labour market


E.g.: In the UK, 1/7 firms was established by immigrants (Centre for Entrepreneurs,
2014)

5. Accident prior to dismissal -> Alternative source of income

● Should the Government Support Entrepreneurs?

Possibilities to support start-up loans or subsidies

Start Up Loans scheme was established to financially aid entrepreneurs by submitting a


business plan to the government

Government provide loans with an interest rate of 6% -> Below average interest rate

£77 million allocated by the UK government in 2013


Beats, Bails and Buyouts Summary

Coming Up Roses:

Uniqlo and Cath Kidston take-over (external economies of scale) to gain market presence

Taxation is an external factor influencing the company’s growth

2013 -> Cath Kidston revenue before tax is more than £19 million

Beats By Apple:

Market Development -> Create new segmentation for premium headphones (Beats)

Unique Selling Point -> Less sound leakage and better audio quality

External Economies of Scale -> Apple’s acquisition for $3.2 Billion

It’s Just Not Cricket:

National sports -> Basketball, baseball and American football -> Have their own championship

Recent growth in football and cricket -> High demand in cricket leading to infrastructure
development

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