Entrepreneurship

What is Entrepreneurship? Section One

Someone who organizes and runs a business. Entrepreneur Someone who organizes and runs a business.

Advantages You are in charge Great Job Satisfaction you decide when and how hard to work and how your business will operate. Great Job Satisfaction Guarantees that you are doing what you truly love. Can lead to good income If successful, there is a lot of money to be made.

Disadvantages Financial Risks Long Hours Stiff Competition You can lose your investment (and sometimes more). Long Hours You are ultimately responsible to make sure the job gets done. Stiff Competition Small business owners are sometimes priced higher than large franchises. No Guarantee of Success Almost two out of three new businesses fail within the first four years.

Traits of the Entrepreneur Motivation Sight and Foresight Decision Making

Motivation The typical entrepreneur is self-motivated. Sets short-term and long-term goals Makes a plan and follows it. Believes in his/her abilities.

Sight and Foresight Entrepreneurs recognize opportunity. Determine problems Develop solutions Build on success

Decision Making Entrepreneurs are quick to make decisions.

Becoming an Entrepreneur Vision Research Planning Go For It!

Vision of an Entrepreneur Keep up with business trends Make a list of ideas

Research your ideas Talk to others Determine what type of equipment you will need What problems will you face? What will your competition be? How will you price your product?

Planning Your Business Make a list of pros and cons. How you will obtain financing? What are your location options?

Go For It! Apply for a loan if necessary. Purchase or lease available space. Set up for business

Ways of Becoming a Business Owner Section 2

Four ways to owning your own business Starting a New Business Buying an Existing Business Buying a Franchise Taking Over a Family Business

Starting a New Business Challenges: Requires much time and effort. High start-up costs Financial risks Rewards: No previous problems to deal with. Build your way up Personal satisfaction

Buying an Existing Business Advantages: Fast start Existing lease Lower start-up costs Established reputation/clientele Advice of previous owner Drawbacks: Existing Problems location competition costly equipment repairs or replacement poor reputation

Buying a Franchise Drawbacks: Advantages: Less Gain Less Risk A portion of your profits go to the parent company. Advantages: Less Risk Recognized Product Established Management System Established Reputation Training and Support Services Advertising Financing

Buying the Family Business Advantages: Financial Support Loyalty, Trust, & Teamwork Learning from family Customer Goodwill Drawbacks: Relationships can be strained Hard to get away from work

Getting Started Section 3

Forms of Legal Ownership Sole Proprietorship owned and run by one person Partnership owned and run by two or more partners. Corporation a group of people authorized to act as a single entity 

Location, Location, Location Things to Consider: Types of other businesses in the area Condition of streets and buildings cost of property Location of Competition Location of Your Customers

Working At Home Disadvantages: Advantages: Residential Restrictions Lack of Social Interaction Requires more motivation Advantages: Less Expensive More Convenient Flexible and Relaxing

Financing Financial Plan Business Plan Spells out start-up costs Lists operating expenses Business Plan describes your product states location specifies number of employees and salaries describes competition describes marketing plan and timetable

Operating Your Business Skills required: Reading Writing Math Listening Speaking

Essential Business Records Income Statement Balance Sheet Cash Flow Statement

Chapter Review: Define terms on page 84, #1 Complete Chapter Review, pp 84-85 (#2-12 except #10)