Chapter 1: Should You Become an Entrepreneur? Pages 4-19

Entrepreneurs: Present and Past Entrepreneur- a person who owns, operates, and takes risks of a business venture Entrepreneurship- the process of running a business of one’s own Employees- people who work for someone else

Entrepreneur vs. Employee Assumes risks and responsibilities Makes direct decisions about business Assumes limited responsibilities Makes indirect decisions about business

Characteristics of Successful Entrepreneurs Independent Self-confident Think and act quickly Determination and perseverance Goal and standard- oriented Creative

Entrepreneurs in U.S. History Who? – Bankers, merchants, candle makers, silversmiths Main Products? – Rice and tobacco When? – Colonial years ( ) Why? – Money and survival

Nineteenth Century Entrepreneurs EntrepreneurProduct/Invention Cyrus McCormick (1831)Reaper Lydia Moss BradleyTransformed marshland into farmland John D. RockefellerOil refinery business Eli WhitneyCotton gin

Early 20th Century Entrepreneurs EntrepreneurProduct/Invention Henry FordModel T Olive Ann BeechAviation industry Clarence BirdseyePackaged frozen foods Rose Knox**Knox Gelatin Corp. **First employer to provide employees with paid sick days, vacation days, and a 5 day work week.

Entrepreneurs and Small Businesses of Today Small business- fewer than 20 employees *This definition is industry sensitive. 5.8 million small businesses contribute to our economy every year. Make up 50% of all U.S. businesses

Why are small businesses so important to our economy? Provide employment Give career options Can assume more risks Contribute to our growing economy

Types of Entrepreneurial Businesses 1. Manufacturing- produces the products they sell Examples: chemicals, stone, clay 2. Wholesaling- sells products to people other than the final customer Example: a supplier who sells greeting cards to greeting card stores

Types of Entrepreneurial Businesses 3. Retailing- sells products directly to the final customer (a person who uses or consumes the product) Examples: grocery store, clothing store 4. Service- provides an act rather than a tangible product Examples: babysitter, lawn care, tanning, oil change, computer repair

Identify Business Opportunities and Set Goals Ways people can find/investigate business opportunities:  Library  Professional journals and magazines  Trade shows- special meetings where companies display their products  Small Business Administration (SBA)- exists to help small businesses by publishing information

Questions to Help Future Entrepreneurs Assess Business Ideas Is there a market for my business? How much money will I need to start? How many hours per week will I have to work? What are the risks/failure ratings? Does my background prepare me for this? How much money could I make?

Assess Your Suitability for Entrepreneurship Self-assessment- evaluation of your strengths and weaknesses  Methods of self-assessment: List hobbies, interests, past experiences, strengths, and weaknesses Ask others Take a test Aptitude- ability to learn a particular kind of job

Advantages of Entrepreneurship Become your own boss Choose a business of interest Be creative Make a lot of money

Disadvantages of Entrepreneurship High risk Uncertain/irregular income Long hours Make all decisions alone

Setting Goals Two kinds of goals entrepreneurs should set:  Financial goals- deals with money Examples: making money, paying off debts  Non-financial goals- deals with personal satisfaction Examples: doing something you like, fulfilling a community need