Role of an Entrepreneur (Edexcel A Level 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?

They Organise Resources	They make Business Decisions	They take Risks
An entrepreneur must be able to gather and coordinate the resources necessary to start and operate a business E.g. When Michael Dell started his computer company from his garage, he had to organise resources such as space, computers, software tools, and employees, and manage the finances	Entrepreneurs must be able to make decisions that will determine the success or failure of their business E.g. A restaurant owner may need to decide what type of food to serve, where to locate the restaurant, and what prices to charge. These decisions require a combination of market research, creativity, and business skill Making the wrong decisions can lead to wasted resources, lost opportunities, and ultimately business failure	Entrepreneurship involves taking risks - financial, personal, or professional E.g. An entrepreneur may invest their life savings into a new venture or quit a secure job to start their own business They may also take risks by introducing new products or entering new markets These risks can pay off with great rewards, but they can also lead to failure and financial loss

• 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 was hired by Starbucks in 1982 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

• 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

Google	Sony Playstation	3M
In 2004, Google introduced Gmail, a free email service that quickly gained popularity due to its large storage capacity and intuitive interface Gmail was developed by a team of Google employees as part of the company's "20% time" policy, which allows employees to spend 20% of their work time on personal projects Gmail became a huge success and is now one of the most widely used email services in the world	In the early 1990s, a group of engineers at Sony proposed the idea of creating a video game console to compete with Nintendo and Sega The proposal was initially rejected by senior management. The engineers persisted and a senior executive supported them Sony PlayStation was launched in 1994 and quickly became one of the most popular gaming consoles of all time	3M's "15% rule" is a policy that allows employees to spend up to 15% of their work time pursuing projects outside of their normal job Post-It Notes were developed by two employees, Spencer Silver and Art Fry Post-It Notes were initially marketed as a solution for bookmarking pages in books, but they quickly became popular for all sorts of purposes Today they generate billions of dollars in annual revenue for 3M

• 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 and individuals/businesses may be held back by a 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

• 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 in business is caused by unexpected factors (internal or external to the business) outside of the entrepreneur’s control even though they are sometimes predictable
• Factors which typically cause uncertainty to 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

Brian Chesky (Co-founder) & Airbnb Response to the Covid-19 Pandemic

In 2020, the COVID-19 pandemic caused many people to cancel their travel plans and stay home to avoid exposure to the virus This had a major impact on Airbnb's business Rather than wait for the pandemic to pass, Chesky quickly pivoted their business strategy to meet the changing needs of their customers They launched a new service called "Online Experiences," which allowed people to participate in virtual tours, cooking classes and other experiences from the comfort of their own homes Airbnb also took steps to address the health and safety concerns of its customers by implementing enhanced cleaning protocols and providing hosts with a guide on how to prepare their homes for guests during the pandemic By quickly pivoting his business strategy and addressing the concerns of his customers, he was able to drive his business forward and position Airbnb for continued success in the future