Gr. 11 Economics
Entrepreneurs are individuals who start their own businesses or aggressively expand existing ones Organize productive resources (human, natural, capital) to make goods or services Assume risk of financial failure
Decide what, how and for whom to produce based on signals from the market potential profits Correct decisions big rewards (profits = revenues - costs) and incorrect decisions big losses (debt) Consumers benefit from high quality, affordable goods of great variety
Go-getter attitude – recognize opportunities, optimistic Risk taking – moderate Hard work – don’t notice the passage of time
Motivation – work for themselves, make money Self-confidence – rely on yourself rather than luck or friends Objectivity – realize strengths and weaknesses and get expert help for weaknesses
80% of businesses fail in the first five years of existence personal characteristics of entrepreneurs lazy, unknowledgeable, unskilled, poor planning, inexperienced misunderstand market – unpopular product, priced too high or low, market too small insufficient start up money
Pasadena, Newfoundland Federal government started in 1986 favourable environment for businesses to grow Low rent – Year 1-2 (25%), Year 3 (50%), Year 4 (75%), Year 5 (110%)
Development officer – financing, business plans, cash-flow forecasts Cost of sharing services – secretarial, photocopying, computers Business advisory committee – lawyer, banker, accountant, business people
Franchise is a license from a corporation (franchiser) to a another corporation or individual (franchisee) to sell a particular good or service with an advertised trade name Franchisee a semi-entrepreneur because less risk, less innovation, less self-reliance
Franchiser benefits from others money investment and hard work which allows them to expand business greatly Franchisee benefits from proven business with less chance of 80% failure rate, but less freedom and must pay fees and % of profit to franchiser in return for trade name and assistance