ENTREPRENEURSHIP Unit 1.2 Students will identify and assess entrepreneurial traits

Students will identify and assess entrepreneurial traits Students will be able to: Describe desirable entrepreneurial character traits and skills Evaluate personal goals and capabilities to determine entrepreneurial potential Assess personal interests Assess ROI objectives Assess capital required Identify ethical issues in business Assess external resources needed to supplement entrepreneur’s expertise

Entrepreneurial Characteristics The following are distinctive traits and qualities entrepreneurs need to run and operate a successful business: Persistent Creative Responsible Inquisitive Goal-Oriented Independent Self-Demanding • Self-Confident • Risk-Taking • Restless • Action-Oriented • Enthusiastic

Entrepreneurial Skills The following are foundational skills entrepreneurs need to run and operate a successful business: Communication Skills Writing, Speaking & Listening Human Relations Skills Math Skills Problem Solving & Decision Making Skills Technical Skills Basic Business Skills

Personal Goals and Capabilities In order to be a successful entrepreneur you must have an interest in being an entrepreneur and have a strong commitment to a business and a lot of energy.  Make your goals realistic and easily attainable.  Financial goals should specify how much money you will earn and how quickly you will pay off debts.  Non-financial goals could be to own your own business or personal satisfaction.

Do You Have the Potential to be a Successful Entrepreneur? Everyone has the potential to become an entrepreneur. But, if you do not feel you have the potential, and you have the desire, you can strengthen your characteristics and skills if you: Read articles and books about entrepreneurs Write about individuals who overcame obstacles to achieve success Watch films about business people, athletes, or others who are achievement-oriented Practice case studies that involve goal-oriented behavior, creativity, and moderate risk-taking

Assess Personal Interests Choose a field that interests you and will provide you with an experience you will enjoy If you enjoy: Book collecting Open a business that sells and trades new, used and rare books Skateboarding Open a skate shop Eating Open a restaurant

Assess ROI objectives Return on Investment (ROI) Investment: What it costs to make and market a product Identify the percentage return you want from the investment The profitable objective involves pricing products to obtain a certain % return on investment Your goal might be 20% ROI

Return on Investment  X The best way to calculate ROI–or profit– is to use circle formulas. Remember these simple rules: Little #  Division line: Divide numbers below the line into the top number BIG # % Multiplication line: Multiply bottom numbers X

Return on Investment  X $50,000 x 20% = $10,000 profit If you have $50,000 to invest and want to make a 20% return on your money, how much will you profit? $ Profit (Little #)  Expected Return (%) Investment (Big #) X $50,000 x 20% = $10,000 profit

Return on Investment If you want to make $10,000 in profit from a $75,000 investment, what % return must you get? $ Profit (ROI)  Expected Return (%) Investment X $10,000  $75,000 = 13.33%

Return on Investment  X $5,000  25% = $20,000 If you made a 25% return on your investment for a $5,000 profit, what was your original investment? $ Profit (ROI)  Expected Return (%) Investment X $5,000  25% = $20,000

Capital Capital: The buildings, equipment, tools, and other goods needed to produce a product, or the money used to purchase these items.  Businesses can have cash flow problems if they start off with too little capital  If your cash flow is inadequate, you may want to obtain more capital for your business

Ethical Issues Code of Ethics: Behavior guidelines that describes appropriate conduct for a business or organization. Not everyone has the same ethical standards. Businesses, employees, customers, and even countries all have their own set of acceptable standards. As a result, business owners should clearly communicate what is and is not acceptable conduct in business.

Discussion of Ethics Discuss your views on these ethical questions: Is it ethical for an employee to use company equipment or supplies for personal use? Is it okay for a business person to accept gifts from clients? How about gifts from suppliers? Your dad asks you to create a budget for yourself each month that he will pay for; school clothes, lunch money, gas money, and entertainment/miscellaneous expenses. Is it ethical to “pad” your numbers to get more money?

Discussion of Ethics Discuss your views on this ethical question:  In order to meet the “Christmas buying season” deadline, you are forced to use a cheaper grade of screws than the engineer’s specifications require. The ones you want are delayed by a strike at the shipping docks (the screws are imported) and will not arrive on-time. It could be days or months until the strike is resolved…no one knows. The screws look exactly the same, but the load-rating is 1/10th less than the specs. You know the engineers usually over-compensate in this area. You also know any delay in the deadline will cost your company $1,000 each day.  What do you do?  What if missing the deadline cost your company $100,000 a day?

Discussion of Ethics Create a “Code of Ethics” for your classroom. 1. 2. 3. 4. 5. 6.

External Resources Needed to Supplement Entrepreneur’s Expertise Consult outside resources: Trade Magazines Specialty Magazines Newspapers Tradeshows and Exhibitions Internet Government Agencies Counselors Local Chamber of Commerce Professional Business Consultants

Let’s Review Describe desirable entrepreneurial character traits and skills Evaluate personal goals and capabilities to determine entrepreneurial potential Assess personal interests Assess ROI objectives Assess capital required Identify ethical issues in business Asses external resources needed to supplement entrepreneur’s expertise