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Lesson 6-1Becoming an Entrepreneur

Objectives: Identify characteristics of successful

entrepreneurs. Recognize the importance of

entrepreneurship in the economy. Describe opportunities and risks of

entrepreneurship.

Do Now

http://knowledge.wharton.upenn.edu/article/ted-leonsis-its-the-greatest-time-to-be-an-entrepreneur/

Listen to blog and take notes After blog:

Why does Leonsis thinks that now is a great time to be an entrepreneur?

How does he define today’s consumer? Do you agree that, as consumers, they possess these qualities?

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Characteristics of Entrepreneurs An entrepreneur is someone who takes a

risk in starting a business to earn a profit. Entrepreneurship is the process of starting,

organizing, managing, and assuming the responsibility for a business.

Entrepreneurs create new product ideas and new businesses. Their ideas often respond to customer needs that are not being satisfied with current businesses.

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What Does it Take? It takes unique skills and personal

characteristics to develop a new idea for a product or service. Not all people who own or manage a business are entrepreneurs.

It is important to have an understanding of business operations and management.

Entrepreneurs come from all age, racial, gender and ethnic groups.

Many entrepreneurs own their first business while in their teens while others may not take that step until retirement.

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Advantages of an Entrepreneurship

Satisfaction from taking a risk and becoming a success.

Showing expertise and skills. Working from home / flexible

schedule. Gaining profit.

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Disadvantages of an Entrepreneurship

Total responsibility for the business. Long hours. Time and effort are

important pieces to making a company successful.

Financial risks.

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Entrepreneurship and the Economy

Entrepreneurship is a key part of the U.S. economy.

Nearly 1 in 10 of all Americans 18-64 years old is involved in some type of entrepreneurship activity.

About 40 percent of new business owners run their own businesses with no help.

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Financing Most of the money needed to start a new business

comes from the entrepreneur and his or her family and friends.

1 in 5 Americans has invested in a business of someone they know well.

Family and friends invest over $100 billion in new businesses each year.

Venture capital is another source of money. It is money provided by large investors to finance new products and new businesses that have a good chance to be very profitable.

Loans from banks and financial institutions and credit from businesses are other sources of financing.

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Productivity

Small businesses are responsible for nearly half of the U.S. gross domestic product each year.

Small businesses account for 55 percent of all innovative products and services developed.

4 Questions You Must Think Critically About Before Starting a Business http://www.entrepreneur.com/article/238279

Toys and Spinning Brushes: How John Osher Found His Way to Profitshttp://knowledge.wharton.upenn.edu/article/toys-and-spinning-brushes-how-john-osher-found-his-way-to-profits/7 Musts to Make Part-Time Entrepreneurship Work for Youhttp://www.entrepreneur.com/article/238169Microsoft CEO Criticized for Suggesting Women Not Ask for Raises http://www.entrepreneur.com/article/2383473 Steps to Happier Customers http://www.entrepreneur.com/article/2382847 Surprising Truths About Mentorshttp://www.entrepreneur.com/article/2382443 Proven Strategies for Running a Great Business That Will Also Work in Our Personal

Lives http://www.entrepreneur.com/article/238263How This Savvy 10-Year-Old Launched a Budding Cookie Business http://www.entrepreneur.com/article/2383037 Tips For Hiring The Best Startup Talent http://www.entrepreneur.com/article/238073Four success strategies I took from the NFL to my businesshttp://www.entrepreneur.com/article/238380Six qualities smart businesses strive to embodyhttp://www.entrepreneur.com/article/238587

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New Business Opportunities Opportunities begin with the creation of

new or improved products and services. An innovation is an invention or creation

that is brand new. Not all entrepreneurship opportunities

emerge from inventions and innovations. Many come from an improved design, more effective procedures, or greater attention to quality.

An improvement is a designed change that increases the usefulness of a product, service, or process.

Example of a product that is an innovation. Example of an improved product.

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Recognizing Risks Developing a successful new business is not

easy. Many more new businesses fail than succeed.

The National Federation of Independent Business reports that of all new businesses, about 1/3 are profitable, 1/3 do not make a profit but continue to operate, and the remaining 1/3 lose money.

Over a ten year period, well over 50 percent of all new businesses are discontinued.

What is the difference between an opportunity and risk? Are all opportunities risk?

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Primary Reasons New Businesses Close Lack of adequate capital Low sales Higher than expected expenses Goals are NOT realistic Competitive pressure The owner is unprepared to manage a growing

business Operations require more time than the owner is

willing to commit Can you think of a business that has recently

closed down?