Role of an Entrepreneur (Edexcel A Level Business)

Entrepreneurs Create & Set up a Business

• Businesses are usually started by an entrepreneur

• An entrepreneur is a person who is willing and able to create a new business idea or invention and takes risks in pursuing success

  • Successful entrepreneurs can identify and pursue opportunities, create value for customers and build thriving businesses

What do Entrepreneurs do?

Entrepreneurs run & Develop an Existing Business

• There are many examples of successful entrepreneurs who have been brought in to run or expand an existing business

• These individuals bring a unique entrepreneurial spirit into the business which helps to drive it forward and expand

Examples of Entrepreneurial CEOs

• Howard Schultz

  • In 1982, Schultz was hired by Starbucks as Director of Retail Operations and Marketing

  • He later left to start his own coffee company but returned to Starbucks in 1987 as CEO

  • Under his leadership, Starbucks expanded globally and became one of the most recognised brands in the world

• Marissa Mayer was brought in to lead Yahoo! in 2012 as CEO

  • She implemented several initiatives to revitalise the struggling company, including acquisitions, product improvements, and a renewed focus on mobile application

Employees can Demonstrate Entrepreneurship Within a Business

• Intrapreneurship refers to the practice of promoting entrepreneurial thinking and behaviour within an existing business

  • It involves empowering employees to think and act like entrepreneurs

  • The business encourages them to take risks, innovate, and develop new ideas and projects that may benefit the business

• Intrapreneurship allows businesses to tap into the creative potential of their employees and generate new products, services or processes that can drive growth and competitive advantage

• This helps to create a culture that generates a sense of ownership and engagement among employees, which increases motivation and helps to retain top talent

• To promote intrapreneurship, businesses may provide resources to employees or offer incentives/rewards for successful projects

Examples of Intrapreneurship in Business

Barriers to Entrepreneurship

• Entrepreneurship can be a challenging journey and many barriers can prevent individuals from starting or growing a successful business

Identifying barriers to entrepreneurship can help a business or individual overcome them

Entrepreneurial capacity

• Entrepreneurial capacity refers to an individual's ability to think creatively, take risks, and identify and seize business opportunities

Access to finance

• Many aspiring entrepreneurs struggle to secure the funding necessary to start or grow their businesses

• Lack of access to finance is a major barrier to entrepreneurship, especially for those from disadvantaged backgrounds

Lack of training/know-how

• Starting and growing a successful business requires a range of skills, including marketing, finance, management, and leadership

• Aspiring entrepreneurs may struggle to develop a viable business plan, attract customers, or manage their finances effectively

Fear of failure/lack of confidence

• Entrepreneurship is inherently risky

• Entrepreneurs may hold back for fear of failure or a lack of confidence

• They may worry about the financial risks involved in starting a business or fear the stigma of failure

Entrepreneurs Anticipate Risk & Uncertainty

• Risk is something an entrepreneur can plan for

  • The probabilities of outcomes are known or at least understood and considered

  • Risk taking is a conscious decision and often the greater the risk, the greater the reward in business

The difference between risk and uncertainty

• Uncertainty is caused by factors outside of the entrepreneur’s control

• Factors that typically cause uncertainty include:

  • Environmental factors such as the Japanese Tsunami in March 2011

  • Economic changes such as Covid lockdowns, Brexit or collapses in the banking system

  • The entry of new competitors

  • Changes in local and national legislation (laws)

  • Changes in the political party governing the country

• Successful entrepreneurs can manage risk and quickly respond to uncertainty in the business environment

The CEO of Airbnb Exemplifies Entrepreneurial Response to Uncertainty