1. Entrepreneurship and Small Business
Chapter 6
Entrepreneurship and Small Business

2. 6-1 Becoming an Entrepreneur
CHARACTERISTICS OF ENTREPRENEURS
Entrepreneur- someone who takes a risk in starting a business to earn a profit

3. Some key factors in starting your own business include:
Wanting to be your own boss
Having special skills and abilities
Coming up with innovative ideas

4. Entrepreneurship- the process of starting, organizing, managing, and assuming the responsibility for a business

5. Entrepreneurs in Action
Sometimes ideas for new products come from problems in every day life
Examples: Abby watched her dad make bacon in the microwave and the bacon came out soaked in grease. She created the Makin Bacon ® microwave tray. She and her father convinced Armour brand bacon to sell the tray.

6. What Does it Take?
Not all people who own or manage a business are entrepreneurs
A person must be able to turn the idea into a business
Entrepreneurs come from:
All age categories, racial, and ethnic groups
Both genders
Varied amounts of educational background
Many entrepreneurs own their fist business while in their teens

7. There are personal traits that are common among entrepreneurs including:
Persistent
Inquisitive
Energetic
Goal oriented
Independent
Self-confident
Creative
Reliable
Competitive

8. Checkpoint>>
Choose 2 of the 9 personal skills of a successful entrepreneur and tell why having each skill would be benefit for starting their own business.

9. ENTREPRENEURSHIP AND THE ECONOMY
Entrepreneurship is a key part of the U.S. Economy
Nearly one in ten of all Americans ages are involved in some type of entrepreneurship activity

10. Employment
Small businesses are responsible for most new employment
Over 60% of new jobs were created by businesses with fewer than 500 employees
Nearly as many small businesses close as begin each year

11. Financing
Most of the money needed to start a new business comes from the entrepreneur, their family, or friends
One in five Americans has invested in a business of someone they know well
More than 50% lend financial support to a family member / relative
29% give to neighbors and friends
8% invest in businesses started by colleagues
More than $100 billion in new businesses each year

12. In the late 1990’s, many venture capital companies were formed
Venture capital- money provided by large investors to finance new products and new businesses that have a good chance to be very profitable
In the late 1990’s, many venture capital companies were formed
They supplied an additional $100 billion per year to start new businesses
This amount dropped to $22 billion in 2005
More than 2,900 companies receive venture capital each year
This shows that many people think new business provide a good investment opportunity

13. Other sources for start-up capital includes: loans from financial institutions, credit given by other businesses

14. Productivity
New and small businesses produce a large volume of goods and services for the economy.
Businesses with just a single owner and no staff account for more than $600 billion in sales annually.
Small businesses are responsible for more than half of the gross domestic product.

15. Checkpoint>>
What are the sources of financing that entrepreneurs use for their new businesses?

16. OPPORTUNITIES AND RISKS
New Business Opportunities
Innovation- an invention or creation that is brand new
Improvement- a designed change that increase the usefulness of a product, service, or process

17. Inventors often develop innovations.
Those inventions may become the basis for a new business.
Examples of well-known innovations include: Apple personal computer and Post-It Notes

18. In addition to inventions, innovations create new services that become the basis for a new business
Example: Frederick Smith envisioned an economical worldwide system for quickly and efficiently shipping packages. This idea led to the start of FedEx.

19. Recognizing Risks
Many successful entrepreneurs and their businesses are well known.
Their success encourages others to think about starting a new business.
More new businesses fail than succeed.

20. The primary reasons businesses started by entrepreneurs close are:
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

21. Checkpoint>>
Where do entrepreneurship opportunities begin?

22. 6-1 ASSESSMENT