Becoming an Entrepreneur

Characteristics of Entrepreneurs An entrepreneur is someone who takes a risk in starting a business to earn a profit. Must have a developed initial plan and desire to be your own boss Innovation and special skills are also necessary Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business.

What Does it Take? Not all business owners are entrepreneurs Must have confidence and capability to turn an idea into a business Come from all genders, ages, ethnic groups (more are male but more even for young ent.). Must have an understanding of business operations, but doesn’t need to come from a degree Often ideas come from problems in daily life…Makin Bacon® example

Entrepreneurial Characteristics Most entrepreneurs possess the following characteristics: 1. Risk Takers 2. Perceptive 3. Curious 4. Imaginative 5. Persistent 6. Goal-Setters 7. Hardworking 8. Self-Confident 9. Flexible 10. Independent

Risk Taker There is no sure thing in business. A failed business could mean bankruptcy or near bankruptcy. Not everyone can cope with that stress Successful entrepreneurs minimize and manage risk through proper business planning and assessment of the venture’s prospects for success.

Perceptive Entrepreneurs do not avoid problems Problems are perceived as opportunities to learn, improve, grow, create and develop new ideas

Curious Entrepreneurs like to know: How things work? Could things work? And answer questions such as: What if? And I wonder… Entrepreneurs do the research to find out the answers

Imaginative Entrepreneurs imagine solutions to problems and create new products or generate new ideas They have a vision (visionaries)

Persistent Successful entrepreneurs face constant challenges such as: 1. mistakes made 2. money and family stress 3. confronting criticism 4. unforseen events Successful entrepreneurs do not give up.

Goal Setter Successful entrepreneurs are motivated by: 1. setting new goals 2. mapping out the steps to take to reach their goals.

Hardworking No success comes easy. There is no easy way to be successful. The road to excellence is not paved by a single act, but rather a series of acts.

Self-Confident Entrepreneurs believe in themselves – they have a postive self-worth (self-esteem), and self- image Believe their efforts will pay off

Flexible The only constant in life and business is change Entrepreneurs view change as an opportunity Must be able to be flexible and adapt to changing trends in the market, technology, economic environment and competitive environments.

Independent Entrepreneurs have a need to be in control of their own destiny. They don’t like to work in a controlled environment being told what to do.

Entrepreneurial Skills Skill means having the knowledge and ability to do something specific. Skills are easier to develop than characteristics. Entrepreneurs have a variety of skills including: Research Leadership and Management Skills Relationship Skills

1. Research Skills One of the most important research skills is knowing what questions to ask. The first step in acquiring knowledge and information is asking a good question.

Research Skills 1. “Why is that?” 2. “What if?” Entrepreneurs may begin with questions such as: 1. “Why is that?” 2. “What if?” 3. “How does that work?” 4. “How could I make it easier to..”? etc

Research Process 1. Ask the questions 2. Gather the research 3. Organize the data collected 4. Analyze/Interpret data collected 5. Draw conclusions 6. Map out next steps

Entrepreneurship and the Economy Entrepreneurship is a key part of the economy Nearly one in ten of all Americans 18-64 is involved in some form of entrepreneurship More than 670,000 new businesses are created annually Businesses with fewer than 500 employees are responsible for over 60% of new jobs created between 1993 and 2003

Financing A majority of money needed to start a new business comes from the entrepreneur and his/her family and friends 1 in 5 Americans has invested in a business of someone they know well Venture capital is money provided by large investors to finance new products and new business that have a good chance of being profitable

Venture Capital Late 1990’s many venture capital co. were formed Supplied > $100 billion each yr. to new businesses Most were high-tech e-commerce start-ups Failed…venture capital decreased Other sources include loans from banks, credit from other businesses

Productivity New and small businesses produce large volumes of goods and services Businesses without employees besides the owner account for $600 billion in sales annually Over ½ of the U.S. GDP comes from small businesses each year!

Opportunities and Risk There are many risks that go along with starting a new business Must give up a regular job and stable income Benefits = personal control over your own business & satisfaction of creating a successful company

New Business Opportunities Innovation is any invention or creation that is brand new Improvement is a designed change the increases the usefulness of a product, service, or product Either of these types of inventions may become the basis of a new business

New Business Opportunities (cont.) Inventors may sell idea to another co. for development and sale Innovations can be anything from Post-its (Arthur Fry) to an artificial heart New services can be considered improvements or innovations as well Entrepreneurs are creative problem solvers

Recognizing Risks Developing a successful new business is not easy The National Federation of Independent Business reports that of all new businesses, only one third actually makes a profit. Over 50% of all new businesses are discontinued.

Recognizing Risks (cont.) The primary reasons that businesses started by entrepreneurs close include: Lack of adequate capital Low sales Higher than expected expenses Competitive pressure An owner unprepared to manage a growing business Operations requiring more time than the owner is willing to commit

Assessment Pg. 131 4 points Complete 1-4, 4 points