Chapter 1:

Enterprise – The Role of

Entrepreneurs and
Intrapreneurs Pg 29 - 35

&
Purpose and key
elements of business
plans
1.2 The role of entrepreneurs and intrapreneurs
• New business ventures started by entrepreneurs / intrapreneurs depends on:
• Creation of an innovative product idea
• New way of offering a service
• Expanding to a new location
• Adapt a product in a new way (not tried before)
• Difference between the roles of an entrepreneur & intrapreneur:
1. Intrapreneur: the ongoing success of a business.
2. Entrepreneur: create & start up a buisiness by -
 Having an idea for a new business
 Creating a business plan
 Investing some of their own savings as capital
 Accepting responsibility of managing a business
 Accepting the possible risks of failure
1.2 The role of entrepreneurs and intrapreneurs

• Qualities of successful entrepreneurs and intrapreneurs:

1. Innovation: don’t have to invent machines or products BUT must be able to -
a) ID & fill a gap in the market
b) Attract customers in innovative ways Requires original ideas & ability to do
things differently to other companies.
c) Promote their business as being different.
2. Commitment & self-motivation: can take up a lot of time to set up and they will therefore
need -
a) Energy
b) Focus
c) Work hard
d) Ambition to succeed
3. Multi-skilled: the entrepreneur must make/provide the product or service, promote it, sell it,
and keep accounts.
The intrapreneur must have the qualities and skills to learn, get on with people, be good at
handling money, and keep accounting records.
1.2 The role of entrepreneurs and intrapreneurs

• Qualities of successful entrepreneurs and intrapreneurs:

4. Leadership skills: if there are employees then the entrepreneur must lead by example and
must have a personality that encourages & motivates.
5. Self-confidence and an ability to bounce back: a true entrepreneur will NOT let the idea of
the risk of failing discourage them because they have a belief in themselves and their business
idea.
6. Risk-taking: they must be willing to take risks to see results.
1.2 The role of entrepreneurs and intrapreneurs
• Barriers to entrepreneurship: i.e., things that make it difficult to become an entrepreneurship.
 Lack of a business opportunity: the original idea for most new businesses come from one of many
sources, such as -
1. Entrepreneur's skills / hobbies
2. Previous employment experience
3. Conferences offering new start-up ideas
4. Small-budget market research (e.g., how many businesses are offering a similar product in your area).
Many businesses start-up in the following industries (because of what the entrepreneur already
has):
a. Fishing (their own boat)
b. Market gardening (producing crops to sell at local markets)
c. Jewellery making, dressmaking, etc.
d. Hairdressing
e. PC repairs
f. Restaurants
1.2 The role of entrepreneurs and intrapreneurs
• Barriers to entrepreneurship: i.e., things that make it difficult to become an entrepreneurship.
 Obtaining sufficient capital: This can be a main difficulty and can be a barrier to
entrepreneurship because -
1. Insufficient savings
2. No knowledge of financial support available
3. No trading record to show banks that you have been trading in the past
4. A poor business plan (fails to convince investors to invest)
 Cost of good locations: limited finance means you should NOT consider an expensive location
THEREFORE it is NB to keep output low so that your revenue can cover your costs (will incr
chances of survival).
• Some prefer to work from home to keep their costs low BUT there are drawbacks to this:
1. Proximity to the area with the biggest market potential
2. Status of location (an impressive premesis generates confidence)
3. Family tensions
4. Difficulty separating personal and work life.
1.2 The role of entrepreneurs and intrapreneurs
• Barriers to entrepreneurship: i.e., things that make it difficult to become an entrepreneurship.
 Competition: there will always be competition for resources and market knowledge THEREFORE
the entrepreneur must offer a unique product OR better customer service to outcompete the
bigger firms who have low-cost advantages.
 Lack of a customer base: entrepreneurs MUST build up a loyal customer base very quickly in
order to survive and ensure long-term success (through good customer service).
• Good customer service can be provided by:
1. Personal customer service
2. Knowledgeable pre- and after-sales service
3. Supplying one-off customer requests that larger firms will not.
1.2 The role of entrepreneurs and intrapreneurs
• Business risk and uncertainty:
• Difference between risk and uncertainty:
 Risk: CAN forsee & calculate – for e.g., if 10 new businesses open up in an area and at the
end of the year 3 of them fail, it means that area has a 30% business failure rate.
 How new entrepreneurs can reduce risk of failure:
1. Study why businesses in the area fail – allows them to avoid the errors those
businesses made that caused their failure.
2. Business planning
 Uncertainty: CANNOT forsee or calculate - can make plans for possible future events but
some will be impossible to predict, like COVID19 (caused a major fall in spending by
consumers and many small businesses were forced to close).
1.2 The role of entrepreneurs and intrapreneurs
• Role of enterprise in a country's economic development:
1. Employment creation: new businesses = self-employment & employing others, i.e., it creates
jobs & national level of unemployment falls.
 Expansion = more job creation (especially in suppliers businesses).
2. Economic growth: incr in output = incr in GDP = economic growth.
 Creation of enough small businesses = economic growth that incr living stds.
 Incr output & consumption = higher tax revenue for gov.
3. Business survival and growth: those that survive & grow will do the following for the economy:
a) Employ large numbers of workers = reduced unemployment.
b) Boost economic growth
c) Take the place of those that failed.
4. Innovation & tech change: creativity adds to dynamism in the economy.
 Stimulate other businesses.
 Make business sector more competitive.
 Those involved in IT can help industries become more advanced in IT applications = more competitive.
1.2 The role of entrepreneurs and intrapreneurs
• Role of enterprise in a country's economic development:
5. Exports: some expand operations to export markets = incr in value of the country's exports &
improve its international competitiveness.
6. Personal development: starting and managing a successful business = development of useful
skills = help with individual self-actualisation.
 Sets a good example for others to follow and can = more successful new businesses = economic boost.
7. Increased social cohesion: unemployment = social problems BUT these can be reduced if
small business sector expands.
 Expansion = job & opportunity creation = social cohesion.
1.2 The role of entrepreneurs and intrapreneurs
• Role of intrapreneurship:
• Questions to consider (with answers):
1. Do enterprise, creativity and innovation end once a start-up has become successful?
 If they do end, the business will fail to adapt to new conditions and create new opportunities.
2. Is there any scope for the qualities & characteristics of successful entrepreneurs to be used
within the existing business?
 Many successful businesses allow workers to take risks and show initiative (just entrepreneurs do)
even when the business is established.
• Large businesses face many problems in changing economies and therefore MUST be
innovative and keep their best managers.
• Many businesses lose employees to new business start-ups that integrate rapid advances in
tech...
• THUS these businesses MUST encourage risk-taking and enterprise by employees
(intrapreneurs) to help create & develop new opportunities.
1.2 The role of entrepreneurs and intrapreneurs
• Role of intrapreneurship:
• Differences between entrepreneurs & intrapreneurs:

• Benefits of intrapreneurship to an existing business:

1. Injecting creativity and innovation into the business - develop new products to incr sales / create
exciting ways of selling existing products.
2. Developing ways of doing business - creativity in solving problems such as low efficiency = more
success than just sticking to the old ways.
3. Driving innovation & change within the business - generating excitement within about a new
opportunity = change more acceptable.
1.2 The role of entrepreneurs and intrapreneurs
• Role of intrapreneurship:
• Benefits of intrapreneurship to an existing business:
4. Creating a competitive advantage - developing more innovative products.
5. Encouraging original thinkers and innovators to stay in the business - i.e., "you don’t have to leave
the company to become an entrepreneur.
1.3 Purpose & key elements of business plans
• An effective business plan is evidence to bankers, venture capitalists and potential
shareholders that:
1. You have thought about the future.
2. You have planned for the future.
•Elements of a typical business plan:
a. Executive summary - overview of business & strategies.
b. Description of the business opportunity - details of the entrepreneurs skills and experience,
nature of the product, target market.
c. Marketing and sales strategy - i.e., why the entrepreneur thinks customers will buy the
product & how the business will sell.
d. Management team & personnel - details of entrepreneurs skills & experience + who they will
recruit.
e. Operations - premisis to be used, production facilities, IT systems.
f. Financial forecasts - future projections, profit & cash flows (for 1 year ahead)
1.3 Purpose & key elements of business plans
• Benefits of business plans:
1. Purpose: obtain finance – no finance will be provided if details about the proposal is not written
down clearly.

2. Provides essential evidence to investors & lenders (i.e., makes financial application more likely to
be successful).

3. Forces the owner to think seriously about the proposal – its strengths, weaknesses.

4. Gives the owners and managers a clear plan of action to guide their actions &
decisions (especially in the early months & years)
1.3 Purpose & key elements of business plans
• Limitations of business plans:
1. Can create a false sense of certainty to business owners – i.e., they rely so much on it that they
forget it is only based on forecasts and predictions.

2. If the plan is NOT detailed and supported by evidence such as market research, prospective
creditors and investors MAY delay in making financial decisions until it is brought up to the
required standard.

3. It might lead entrepreneurs to be inflexible - if there is nothing in the plan that forecasts
potential new opportunities, then the plan may be rejected (i.e., future profits & growth =
rejected).