INTRODUCTION TO ENTREPRENEURSHIP
Chapter 1
WHAT IS AN ENTREPRENEUR?
 Definitions
 People who own, operate, and take the risk of a business venture are called
_entrepreneurs______________.
 _ Entrepreneurship________ is the process of running a business of one’s own.
 Employees
are people who work for someone else
Employees vs. Entrepreneurs?
 Both may make _decisions_________, but only the _entrepreneur_____ is directly
affected by the consequences of those decisions.
 Additional earnings go to the business owner
, not the employee
List 10 things successful entrepreneurs do:
Do what you enjoy
Take what you do seriously
Plan everything
Manage money wisely
All about the customer
shameless self promoter
project a positive business image
get to know your customers
level playing field with technology
be accessible
What counts as an entrepreneur?
• 84 Million
Americans would prefer to work for themselves
• 27 Million
Small Businesses in U.S. start every year
• 6 Million
Small Businesses have employees
• 1.9 Million
Small Businesses less than 5 years old
• 400,000
new businesses with employees started in the last year
• 230,000
new businesses with employees that are still in business 5 years later
• 86,000
new businesses with employees that survive 5 years and have greater
than $500,000 in annual sales
• 4,000
new companies started every year that have $10M sales over a 5 year
period
• 500
new companies that reach $50M in 5 years
Why do people become entrepreneurs?
 People go into business for themselves for many reasons.
 Be their own boss
 Tired
of the fast-paced corporate environment
 Pursue their own ideas
/fulfill a personal dream
 Pursue financial rewards
1
TYPES OF ENTREPRENEURIAL BUSINESSES
 Manufacturing
 Wholesaling
 Retailing
 Service
 Agricultural
 Mining and extracting
Manufacturing Businesses – produce
the products they sell
 _apparel_______ and other textile
 Fabricated metal products
products
 Food products
 _electronics__________ and other
 Industrial machinery and equipment
electrical equipment
 _printing_________ and publishing
Wholesaling Businesses – sell products to people other than the final customer
 Example: Sam’s Club or CostCo
Retailing Businesses – sells products directly
them
 Grocery
stores
 Clothing stores
 _department__________ stores
 Florist
Service Businesses – sell services
 Hotels
 Hairdressers
 Repair Shops
 Babysitting
 Consulting
to the people who use or consume
 Bakery
 Shoe stores
 Sporting goods and bicycle stores
rather than products
 Dance
lessons
 Flower decorating
 House cleaning
 Lawn
care
Agricultural Businesses – generate fresh produce and other farm products
Mining & Extracting Businesses –take resources out of the ground
consumed
so they can be
ENTREPRENEURS IN UNITED STATES HISTORY
 Nineteenth century entrepreneurs
 Cyrus McCormick – farming
 John D. Rockefeller – petroleum
 Early 20th century entrepreneurs
 Henry Ford – automotive
 Clarence Birdseye – frozen food
 Entrepreneurs today
 Ted Turner – media
 Mark Zuckerberg – social networking
What do these individuals have in common?
2
SMALL BUSINESSES TODAY
 There are 27 million small businesses in the U.S.
 Small Businesses account for 60-80%
of all new jobs created
 Sole proprietors:
 75% of all businesses in U.S.
 5%
of all sales revenue
 Small firms (<500 employees) represent 99.9%
of American business
CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS
 are independent
 are self-confident
 have determination and perseverance
 are goal-oriented
 have a need to achieve and to set high standards for themselves
 are creative
 are able to act quickly
 are technologically
current
ASSESS YOUR SUITABILITY FOR ENTREPRENEURSHIP
 Self-assessment – an evaluation of your strengths and weaknesses
 Assess your interests
 Choose a field that interests you
 Assess your aptitude
 the ability to _learn___________ a particular kind of job
 Assess the advantages of entrepreneurship
 Assess the disadvantages of entrepreneurship
ADVANTAGES OF ENTREPRENEURSHIP
 Entrepreneurs are their __own_________ bosses.
 Entrepreneurs can _choose_______ a business that interests them.
 Entrepreneurs can be creative.
 Entrepreneurs can make lots of _money____________.
DISADVANTAGES OF ENTREPRENEURSHIP
 Entrepreneurship is _risky__________.
 Entrepreneurs face _uncertain________ and _irregular__________ incomes.
 Entrepreneurs work _long_____________ hours.
 Entrepreneurs must make all _decisions_____________ by themselves.
3
INVESTIGATE OPPORTUNITIES
 Opportunities – possibilities that arise from existing conditions
 Ideas – thoughts or concepts that come from creative thinking
IDENTIFY BUSINESS OPPORTUNITIES
 Is there a _market_______? Will people buy?
 How much _money_______ would it take? Will I be able to borrow that much?
 How many _hours___ a week are required? Am I willing to commit that much time?
 What are the _risks________? What is the rate of business failure?
 Do I have the right _background_____________? Do others who own this kind of
business have more experience?
 How much _money___________ could I make?
SET SMART GOALS
Specific
Measurable
Attainable
Realistic
Timely
SMART GOALS
Goals should be specific and answer: what, why, and how?
Goals should establish ways to measure your progress
Goals should not be too far out of reach
Goals should represent things to which you are willing to commit
Goals should have a timeframe for achievement
 Financial goals
 Realistic
 Measurable
 Non-financial goals
 Personal satisfaction
 Serving a community need
 Easily attainable in the time allotted
 Doing something you like
 Enjoying personal independence
PROBLEM SOLVING
1. Define
the problem
• Write down what the problem is and why it is a problem
• Quantify the problem
2. Gather information
• Collect information that can help solve the problem
3. Identify various solutions
• Identify all possibilities before selecting a particular solution
4. Evaluate alternatives and select the best option
• Quantify or rank alternatives
5. Take action
• Implement the solution
6. Evaluate
the action
• Even a well-thought-out solution may not work
PROBLEM SOLVING SKILLS
• Communicate
• Brainstorming – a creative problem-solving technique
• Generate a large number of fresh ideas
• Learn from Mistakes
4