© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Entrepreneurship

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California The Economic Questions What should be produced? When will it be produced? How will it be produced? Who will produce it? Who gets to have what is produced?

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Why Be an Entrepreneur? Control Over Time Fulfillment Creation/Ownership Control Over Compensation Salary Wage Dividend Control Over Working Conditions

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Costs & Benefits of Becoming an Entrepreneur Benefits Independence Satisfaction Financial Reward Self-Esteem Costs Business Failure Obstacles Loneliness Financial Security Long Hours/Hard Work

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California 5 Roots of Opportunity in the Marketplace Problems Changes Inventions Competitions Technological Advances

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Define Your Business Who will the business serve? What will the business offer the customers? How will the business provide the products or services it offers?

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California 3 Elements The Offer Target Market Production and Delivery Capability

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California What Is Your Competitive Advantage? Can you supply your product at a lower price than other businesses serving your market? Can you attract more customers than your competitor by offering better quality or some special service?

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Competitive Strategy = Business Definition + Competitive Advantage

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California 6 Factors of Competitive Advantage Quality Price Location Selection Service Speed/Turnaround

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Naming Your Business The name must help identify the business. Keep it simple. It tells customers what the company does, sells, or makes. Examples: Federal Express, America On-Line, Burger King, Microsoft

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Your Company’s Core Beliefs “At Superior Printing, we believe in business practices that affect the environment as little as possible.” At Sheila’s Restaurant, we believe in supporting local farmers.”

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Defining the Unit of Sale Manufacturing: One order (any quantity, e.g., 100 watches Wholesale: A dozen of an item (e.g., 12 watches) Retail: One item (e.g., 1 watch) Service: One hour of service time (e.g., one hour of lawn-mowing service) or a standard block of time devoted to a task (e.g., one mowed lawn)

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Revenue – Cost of Goods Sold (COGS) = Gross Profit

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Marketing A Business That Markets vs. a Market-Driven Business To be successful, a business must develop its marketing vision first, and then use it as a basis for all subsequent decisions. Owning a Perception in the Customer’s Mind McDonald’s: Food tastes exactly the same as at every other McDonald’s. Burger King: “Have It Your Way,” “Broiled, Not Fried,” “The Whopper Beats the Big Mac.” Domino’s Pizza: Delivers orders in less than 30 minutes.

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Marketing (cont.) Developing a Marketing Plan Question: Why does a customer go to a hardware store to buy a drill? Answer: Because she needs to make a hole. The customer needs a hole, not a drill. Therefore, explain to the customer what good holes your drills make!

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Market Research Helps you visualize your customer. A process that helps you find out who your potential customers are. where you can reach them. what they want and need. Method matters.

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Market Research (cont.) Find out what potential customers really think about the following: Your product or service The name of your business Your location Your logo Your prices Your promotional efforts

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Market Research (cont.) Helps you get a fix on who your customers are. How old are they? What kind of income do they earn? What is the benefit your product or service offers that would best attract them?

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Types of Market Research Internet Research Magazine Articles Business Library

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Types of Market Research (cont.) Surveys and Focus Groups Product use and frequency of purchase Places where consumers purchase the product (competition) Business names, logos, letterheads—everything that represents your business in a consumer’s mind Must gather general information about customers, such as Interests and hobbies Reading and television- watching habits Educational background Age Annual income Gender

© 2008 Greg Fisher, California Academy of Math and Science, Carson, California Types of Market Research (cont.) Focus-Group Discussions A dozen participants General Research Statistical Research (Statistics) Industry Research