When Peter Cruddas spotted a gap in the financial services market in the 1990s, he took a risk and started his own business – CMC Markets. CMC Markets is now a global company dealing in foreign exchange. Duncan Bannatyne's story started when he seized the opportunity of buying a £450 ice cream van. From this one vehicle, he built up his first business, Duncan's Super Ices, with fleet of vans and an annual turnover of over £300,000.
Both of these entrepreneurs seized the opportunities they saw to pursue businesses they believed in. Many entrepreneurs start their own businesses each year. Some are successful and some are not. Entrepreneurship has a number of important aspects. One of these is the willingness to take a risk, however this risk should be managed by weighing it against the potential rewards. To fund his second business, a new care home, Duncan Bannatyne had to sell his ice-cream business as well as his house, car and television – a risk that clearly paid off. Another aspect of entrepreneurship is innovation. This involves adding new ideas that improve on existing ones. Peter Cruddas used the latest technology at the time, the internet, to find better ways of carrying out different financial transactions for his clients.
Of course, all new businesses need to start with an idea. For Geoffrey Galitzine, the business idea came to him while he was flying a plane. Galitzine, a former City financier, suddenly realised there was a better way of disposing of the many empty glass bottles that restaurants and bars need to get rid of each week. These were being taken away by numerous lorries to be recycled, but much of what these lorries were transporting was actually the air inside the bottles."Taking the air out at source, before it got transported to waste centres, had to be the right answer" he commented. He started Smash & Grab with three friends and they invented a machine that crushes bottles on site, cutting 80% of the volume of waste thereby resulting in fewer lorry loads. This not only cuts costs for businesses but also reduces their carbon footprints. Galitzine now hopes to sell the Little Smasher globally. (The Sunday Times 18th April 2010)
- List five different skills and qualities that entrepreneurs may need.
- Explain why some people wish to start their own businesses.
- Analyse the potential risks and rewards you may face if you started up your own business.
Answers to questions
- List five different skills and qualities that entrepreneurs may need. Answer may include: • Risk management • Creativity and innovation • Determination • Teamwork • Motivation • Can-do attitude • Effective communication skills • Organisation • Leadership • Initiative.
- Explain why some people wish to start their own businesses. Answer may include: • A desire to be their own boss • Spotting a gap in the market • Developing an interest • Thinking of a good idea • Becoming unemployed.
- Analyse the potential risks and rewards you may face if you started up your own business. Risks may include: • Own money and financial security • Family/friends money • Reputation • Time with family/friends • Health Rewards may include: • Profit • Freedom to make business decisions • Self esteem • Making a difference.