Entrepreneurial Motives & Characteristics (Edexcel A Level Business)

Revision Note

Characteristics & Skills Required by Entrepreneurs

  • Entrepreneurs require a unique set of characteristics and skills

1-5-2-characteristics-and-skills-required-by-entrepreneurs

The skills and characteristics required by entrepreneurs

  • The characteristics have been explained through the different sections in 1.5.1

  • Perhaps one of the most valuable skills of an entrepreneur is the ability to communicate persuasively

    • Persuade potential financial backers of the merits of their idea

    • Persuade people to join them in creating the product/service

    • Persuade customers of the value of their product/service

  • All of the skills work together to create and drive an innovative idea towards success

Reasons Why People Set up Businesses

  • People set up businesses for a variety of financial and non-financial reasons

Financial & Non-financial reasons for Setting up a Business

Financial Reasons

Explanation

Example

Profit maximisation

  • People want to create a profitable business that generates substantial revenue and profit for themselves and their shareholders

  • Amancio Ortega, the founder of Zara,  built a fast-fashion empire that has become one of the most profitable clothing retailers in the world

Profit satisficing

  • Occurs when the entrepreneur is not solely focused on maximising profits but rather achieving a satisfactory level of profit 

  • This is common among small businesses, where the owner may prioritise their work-life balance

  • Yvon Chouinard, the founder of Patagonia, created a successful outdoor clothing and gear company that was initially built to help finance his climbing expeditions

Non-financial Reasons

Explanation

Example

Ethical stance

  • Some entrepreneurs may have a particular ethical stance (e.g. environmental sustainability or social justice) that they want to build their business around

  • Anita Roddick, started The Body Shop, as she wanted to create a company that would promote environmental sustainability, fair trade and human rights

Social entrepreneurship

  • These entrepreneurs aim to create a business that seeks to address a social or environmental problem while also earning a living

  •  Blake Mycoskie, the founder of TOMS Shoes, created a business model that donates a pair of shoes to a child in need for every pair sold

 Independence

  • Many people want to be their boss and have control over their work

  • They may be dissatisfied with traditional employment structures or desire the freedom and flexibility that comes with running their own business

  • Travis Kalanick and Garrett Camp, the co-founders of Uber, started their business with a desire for independence and the ability to work from anywhere

 Home working

  • With the advent of technology, many people have started businesses from their homes and this offers them more flexibility and a better work-life balance

  • Sara Sutton, the founder of FlexJobs, had a desire for independence and the ability to work from home and this led her to create a successful online job board that specialised in remote and flexible work opportunities

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