What is Entrepreneurship?

What is Entrepreneurship

Entrepreneur• An individual who

undertakes the creation, organization, and ownership of an innovative business with potential for growth

Entrepreneurship• The process of

recognizing or creating an opportunity, testing it in the market, and gathering the resources necessary to go into business

Benefits to Society

Contributions made by Entrepreneurs to society• Recognize consumer

wants and needs—turn demand into supply

• Create a market for venture capitalists

• Provide jobs for communities

• Can change society• Steve Jobs, Mark

Zuckerberg

What Entrepreneurs Contribute To Society(Video)

Rewards and Risks

Rewards Risks

Be your own boss

Do something you enjoy

Express creativity

Set your own schedule

Job security

Potential for greater income

Competition

Long Hours

Uncertain Income

Full Responsibility

May lose investment

What Makes a Successful Entrepreneur?

Characteristics of a

successful entrepreneur

(not an exhaustive

list!)

• Confident• Determined• Resourceful• Responsible• Goal oriented• Creative• Flexible• Self motivated• Risk taker

Online Personality Quiz

Rewards and Risks

Rewards Risks

Be your own boss

Do something you enjoy

Express creativity

Set your own schedule

Job security

Potential for greater income

Competition

Long Hours

Uncertain Income

Full Responsibility

May lose investment

What Makes a Successful Entrepreneur?

Characteristics of a

successful entrepreneur

(not an exhaustive

list!)

• Confident• Determined• Resourceful• Responsible• Goal

oriented• Creative• Flexible• Self

motivated• Risk taker

Online Personality Quiz

Sole Proprietorship

The easiest and most popular form of business ownership is the sole proprietorship.

sole proprietorship

a business that is owned and operated by one person

The owner of a sole proprietorship:

receives the profits,incurs any losses, andis liable for the debts of the business.

Sole Proprietorship

Sole Proprietorship

In a sole proprietorship the owner must decide how much liability protection he or she needs.

liability protection

insurance against the debts and actions of a business

Sole Proprietorship

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Advantages

Sole proprietorship is easy and inexpensive to create.

The owner has complete authority over all business activities.

It is the least regulated form of business ownership.

The business pays no taxes; income is taxed at thepersonal rate of the owner.

Sole Proprietorship

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Disadvantages

The owner has unlimited liability.

Raising capital is more difficult.

The business is totally reliant on the skills and abilities of the owner.

The death of owner dissolves the business unless there is a will to the contrary.

Disadvantages

The biggest disadvantage of a sole proprietorship is financial.In this form of business ownership, the owner has unlimited liability.

unlimited liability

full responsibility for all debts and actions of a business

Partnerships

A partnership draws on the skills, knowledge, and financial resources of more than one person.

partnershipan unincorporated business with two or more owners who share the decisions, assets, liabilities, and profits

Partnerships

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Advantages

Partnerships are inexpensive to create.

General partners have complete control.

Partners can share ideas.

Partners can secure investment capital more easily and in greater amounts.

Partnerships

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DisadvantagesIt is difficult to dissolve one partner’s interest without dissolving the partnership.

There may be personality conflicts.

Partners can be held liable for each others’ actions.

In a corporation, the owners of the business are protected from liability for the actions of the company.

The Main Idea

What Is a Corporation?

There are three types of corporations:•C-corporation•Subchapter S corporation•nonprofit corporation

corporation

a business that is registered by a state and operates apart from its owners; it issues shares of stock and lives on after the owners have sold their interest or passed away

C-Corporation

A C-corporation is the most common corporate form.

C-corporation

an entity that pays taxes on earnings; its shareholders pay taxes as well

C-Corporation

In smaller corporations, the founders generally are the major shareholders.

shareholders

the owners of a corporation

C-Corporation

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Advantagesstatus

limited liability

ability to raise investment money

perpetual existence

employee benefits

tax advantages

C-Corporation

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Disadvantagesexpensive to set up

income more heavily taxed

subject to double taxation on income

pays taxes on profits

stockholders taxed on dividends

Nonprofit Corporation

A nonprofit corporation must fall within one of four categories:•religion•charity•public benefit •mutual benefit

nonprofit corporation

a legal entity that makes money for reasons other than the owner’s profit; it can make a profit, but the profit must remain within the company