1. Chapter 1 Every0ne lives by selling something. -Robert Luis Stevenson, Scottish author

2.  Describe the difference between employees and entrepreneurs.  Discuss how entrepreneurs create value from “scarce” resources.  Explain why entrepreneurs like change.  Evaluate the pros and cons of owning your own business. Key Objectives Chapter 1 What is Entrepreneurship Mr. D.Schmidt2

3.  Entrepreneur  Free enterprise system  Profit  Res0urce  Voluntary exchange  Business  Capital  Capitalism  Economy  Employee Vocabulary Chapter 1 What is Entrepreneurship Mr. D.Schmidt3

4.  Most Americans make money working in a business.  A business is buying and selling of products and services in order to make a profit.  An employee who works in another person’s business.  Entrepreneurs are people who work in their own business.  The success of the business belongs to the entrepreneur. Differences between Employees and Entrepreneurs Chapter 1 What is Entrepreneurship Mr. D.Schmidt4

5.  Entrepreneur is a risk taker, a can-do person.  Always looking for opportunity to learn new skills and take on new responsibilities.  Show your employer that you understand business and working to improve the profitability of the company.  “Entrepreneurship is a way of thinking, reasoning, and acting that is opportunity- obsessed, holistic in approach, and leadership balanced.”—Jeffery Timmons Chapter 1 What is Entrepreneurship 5Mr. D.Schmidt Think Like an Entrepreneur

6. 1.They listen. 2.They observe. 3.They think a)Problem solvers, for profit! Chapter 1 What is Entrepreneurship 6Mr. D.Schmidt Entrepreneurs do three important things:

7. Seeing yourself as an entrepreneur.  “The best way to get good ideas is to have lots of them.” –Linus Pauling, Nobel Peace Prize winning scientist.  Develop an Idea Journal  Carry a small pocket-size notebook all the time.  Listen, observing, and thinking skill to see opportunities to meet consumer needs.  Describe briefly every you have with a business. Chapter 1 What is Entrepreneurship 7Mr. D.Schmidt Skills Means Success #1 pg. 4

8.  Big Business is defined as follows:  A company with over 100 employees.  Selling more than million dollars of good or services annually.  Small business are business that are smaller.  “America’s small business owners and their employees represent more than half of the private workforce. These entrepreneurs who create more than 75% of new jobs nationwide and generate more than 50% of the nation’s GDP, and employees who work in small businesses, deserve our thanks. We salute them.” –George W. Bush, President Chapter 1 What is Entrepreneurship 8Mr. D.Schmidt Big and Small Business

9.  Rule of thumb: It is realistic to expect to lose money for at least three months.  Intial start-up costs and loans.  Change in customers behavior.  New customers come from other business.  20% Repeat customers. Important people.  60% of all new business close operations before 5 years.  Lack of capitalization  Lack of sales, lack of repeat customers.  Can’ beat the competition! Chapter 1 What is Entrepreneurship 9Mr. D.Schmidt A Business Must Make a Profit To Stay in Business

10.  When business is making a profit, something is going right.  Profit is adding value to scarce resources.  Scarce resources are something with value that is limited, such as oil, and wood.  What are other examples of Scarce Resources?  Mrs. Fields Original Cookies takes scarce resources flour, sugar, chocolate, and etc. and make cookies. Saless are greater than the total amount of the scarce resources. Chapter 1 What is Entrepreneurship 10Mr. D.Schmidt Profit Is the Sign that the Entrepreneur is Adding Value

11.  What should be produced?  How will it be produced?  Who gets to have what is produced?  Economy- The study of how different groups answer the above questions.  Free enterprise system- A system that distributes wealth. Anyone can start a business (within the laws). To sell goods and/or services to the public for profit.  Capital-Is the money to start a business. Chapter 1 What is Entrepreneurship 11Mr. D.Schmidt The Economic Question

12.  “Free-trade system”  Transactions between two parties who agree to trade money for goods or services.  No one is forced to trade.  Both parties benefits in the transactions.  Business receives profit.  Consumer receives utility of the product or services (benefits). Chapter 1 What is Entrepreneurship 12Mr. D.Schmidt Voluntary Exchange

13.  Entrepreneurs are discourage to waste scarce resources.  Control costs.  Entrepreneurs must effectively provide goods and services to satisfy consumers.  Encourages competition  Entrepreneurs view changes as opportunity. Chapter 1 What is Entrepreneurship 13Mr. D.Schmidt Benefits of Free Enterprise

14. Reading for Information and Understanding Gathering and Interpreting Information. Look for articles about the following people on the Internet. Read the articles and tell me what business or opportunity by taking advantage of a change, trend, or consumer need. Use MS Word to write the document. Chapter 1 What is Entrepreneurship 14Mr. D.Schmidt Skills Means Business #2 pg. 8  Lane Bryant  John H. Johnson  Sarah Breedlove Walker  Russell Simmons  Julie Algner-Clark

15. Advantages Disadvantages  Business failure  Obstacles  Loneliness  Financial Insecurity  Long hours/hard work  Control over time  Creative, full filling life  Opportunity to create great wealth  Control over compensation  Salary, wage, dividend, commission  Control over working conditions.  Self-Evaluation  Participation in an International community.  Opportunity to help one’s community. Why be an Entrepreneur? Chapter 1 What is Entrepreneurship 15Mr. D.Schmidt

16. Reading for Information and Understanding Interpreting, and analyzing information See page 10 of the textbook to see why people start businesses. Chapter 1 What is Entrepreneurship 16Mr. D.Schmidt Skills Mean Success #3 pg.10

17.  Entrepreneurs make great wealth through their business’s profits.  Entrepreneurs take that profits and do the following.  Take the profits for themselves as a reward for taking the risks.  Reinvest the profits back to the company to make it larger and more profitable.  Start another business. Chapter 1 What is Entrepreneurship 17Mr. D.Schmidt Owner is the Key to Wealth

18. 1.Wealth 2.Influence 3.Control Profit is the reward for satisfying a customer need. Chapter 1 What is Entrepreneurship 18Mr. D.Schmidt Living a Life You Will Love

19. Chapter 1 What is Entrepreneurship 19Mr. D.Schmidt