Download Intro to Entrepreneurship

Entrepreneurship
What is an Entrepreneur?
•People who organize, manage, and
take the risk of owning and
operating a business.
•A person who starts a new business.
•Entrepreneurship is the process of
starting and managing your own
business.
Why is Entrepreneurship
Important?
• The wealth of the United States was built on
the energy and hard work of entrepreneurs.
• Examples:
• Ray Kroc: McDonald’s Corporation
• Henry Ford: Ford Motor Company
• Walt Disney: Walt Disney Company
Who is an Entrepreneur?
• Anyone can be an entrepreneur!
• In the United States, everyone is free to start
any legal business.
So What Does it Take?
• The two most important traits are:
• Commitment to the business
• The entrepreneur is willing to do whatever it
takes to make the business successful.
• Having a product that customers will buy
• Most businesses fail because customers are
unwilling to purchase the product.
The Big Risk
• More than 3,000 new businesses are started
each WEEK in the United States.
• 2 out of 3 of these businesses close their doors
within four years.
3 Aspects of Entrepreneurship
• 1. The identification/recognition of
market opportunity and the generation
of a business idea (product or service) to
address the opportunity
3 Aspects of Entrepreneurship
• 2. Finding and acquiring resources in the
face of risk to pursue the opportunity
3 Aspects of Entrepreneurship
• 3. The creation of an operating business
organization to implement the business
idea
Advantages
•You are your own boss
•Enjoy the profits from you efforts
•Sense of pride in your business
•Doing something you love
•Flexibility in your work schedule
Disadvantages
• Long hours
• Responsibility/Pressure
• Risk of failure
• Need money to start
• May have to mark hard decisions
(hiring, firing, etc.)
Personality Traits
Independence: the desire to be your own boss.
Self Discipline: the way we train ourselves to meet
certain goals.
Concentration: “sticking” it out through
distractions to get the job done.
Persistence: never showing discouragement,
always thinking of new ways to approach a
problem and acting on your ideas.
Personality Traits
Creativity: the ability to come up with clever,
workable solutions.
Businesslike Attitude: possessing the knowledge
of your chosen business and having the savvy to
conduct business.
Hard Work: being capable of doing the work and
enjoying it.
Motivation: the mental and physical drive to
succeed, to accomplish chosen tasks on your own
terms
Personality Traits
Confidence: having a firm belief in your own
capabilities and your chances of success.
Willingness to Take Risk: the readiness to sacrifice
your own security, if need be, in order to
accomplish your goals.
Human-Relation Skills: the ability to get along with
others, to inspire cooperation, confidence and
loyalty
Personality Traits
Communication Skills: the ability to express
yourself and to understand others so that ideas
can be shared.
Technical Ability: the expertise to produce the
goods and services of your business.
Ability to Make Decisions: the talents to analyze
complex situations and draw conclusions that will
make the business succeed.
How to Start your Own
Business
1) Buy an Existing Business
2) Buy a Franchise
3) Start your own Business
Buy an Existing Business
Advantages
Disadvantages
• Already have customers
& employees
• You may be buying
problems
• Location, Business
Equipment existing
• “Why is this business
being sold?”
• Working operations
• Person who sold the
business may act as
consultant
• Not making a profit? (or
just retiring?)
Buy a Franchise
Advantages
• Established
product/service and
reputation
• Franchisor provides
assistance (training)
• Quantity purchasing=
discount
Disadvantages
• Franchisor makes many of
the decisions
• Initial cost may be high
($20,000-$75,000)
• Must pay royalty fee (based
on your profits, 5-10%)
• Franchisor can terminate
agreement
Start Your Own Business
Advantages
Disadvantages
• You get to make all of the
decisions
• You take on all of the risk
• You get all of the profits
• More difficult to get
loans & raise money for
the business
• Requires a great deal of
time & research
Start-up Costs
• The costs to start a new
business
• Operating expenses: the costs
to keep a business running
• Most businesses need a loan to
get started
• The most common source of
loans is a bank
The Business Plan
• A business plan is a written document that
describes a business and how it will operate.
• Entrepreneurs spend up to 100 hours on their
business plans. It is a valuable research and
planning tool.
• Includes: executive summary, description of
business, industry/competitive analysis,
customers/target market, marketing plan,
operations plan, and financial plan
U.S. Small Business
Administration
• Because businesses are so important to the
U.S. economy, the government created the
SBA to aid small business owners.
• The SBA has offices in every state
• Main goal: To help business owners obtain
loans; also provides management and
technical assistance to more than one million
small business owners.
How Entrepreneurial
are YOU?