All About Entrepreneurship CTAE-FS-11: Entrepreneurship - Learners demonstrate understanding of concepts, processes, and behaviors associated with entrepreneurial performance 1

Entrepreneurship Many of the thousands of small businesses that make up the U.S. economy are owned and operated by women and men who created their own companies. 2

Vocabulary EntrepreneursEntrepreneurship People who own, operate, and take the risk of a business venture The process of running a business of one’s own 3

Employees vs. Entrepreneurs Employees: people who work for someone else Entrepreneurs: 1) assume risks and 2) directly affected by the consequences of business decisions Both: Make Decisions Example: Sam Jones manages a record store owned by Felipe Santiago. Sam decides to keep the store open until midnight on weekdays. ◦If the additional hours bring in more customers and profit, Sam may get a raise but the extra earnings will flow to Felipe, the owner. 4

Why do people become entrepreneurs? Integrity & Ethical Behavior People have completely different personal and professional reasons ◦Such as, leaving the fast paced corporate world to set their own schedules ◦Such as, pursuing a personal dream ◦Such as, working from home to raise a family yet still earn an income Operate with integrity & exhibit ethical behavior in all areas of business to ensure the highest standards of conduct are observed in the relationships with everyone affect by the business activities. When considering whether or not behavior is ethical, both the actions taken by the business owner & the possible results should be considered. 5

Types of Entrepreneurial Businesses 1. Manufacturing Businesses 5. Other Business Areas Produce the products they sell; usually resources and supplies ◦Food products 2. Wholesale Businesses Sell products to other businesses rather than the final consumer ◦Apparel 3. Retail Businesses Sell products directly to the people who use them or consume them ◦Florists 4. Service Businesses Sell services rather than products ◦Babysitting Agricultural businesses generate fresh produce and other farm products Mining & Extracting businesses take resources like coal out of the ground so that they can be consumed Green Entrepreneurship: Being “green” or organic is a growing movement toward environmentally friendly products. ◦Advantage: often favored by customers because consumers benefit the earth & conserve resources by using their products/ services 6

Recognizing Opportunity Entrepreneurs have played an important role in the history of America’s economy & will continue to shape our economy in the future. ◦Small firms/ businesses with fewer than 500 employees make up the overwhelming majority of the existing 29.6 million jobs over the past 15 years compared with 1.8 million created by large businesses. There are many businesses today that started small & have grown into large companies that are making a major impact in our economic system Entrepreneurs Who Changed America: ◦Starbucks Coffee Company ◦The Home Depot ◦Harpo Productions, Inc. 7

Entrepreneurial Opportunities in Economic Recovery During economic downturns, small business owners have the flexibility to be more creative & take more risks than large companies. The result is technological change & increased productivity which makes small businesses a significant part of the economic recovery process. The American Recovery & Reinvestment Act of 2009 was passed to stimulate the economy. Click to read provisions of the ARRA for individuals and businesses. Click to read provisions of the ARRA for individuals and businesses 8

Business Success or Failure Although there are many opportunities for entrepreneurial success, there is also a risk of failure. ◦67% of new businesses survive for 2 years ◦44% of new businesses survive for 4 years Major factors in a firm’s success include but are not limited to: ◦Having adequate capital & being large enough to have employees ◦The owner’s education, experience, & knowledge of business ◦The reason for starting the firm  Must be sufficiently motivating ◦The owner’s ability to work with others ◦The owner’s ability to choose the right business & make sound decisions ◦The owner’s entrepreneurial characteristics 9

Characteristics of Successful Entrepreneurs Successful Entrepreneur Independen t: to make their own decisions & do something they enjoy Self Confident: in order to make all the decisions and bounce back from bad ones Determined & Persistent: to persist through hard times Goal Oriented: knowing what they want & staying focused to achieve it Need to Achieve & To Set High Standards: motivated by setting & achieving goals Creative: to find new ways to market & new solutions to problems Able to Act Quickly: to make quick decisions to stay ahead of competitors Keep Up To Date with Technology: to learn new technology that can help with their business 10

Characteristics of Good Team Members Commitment To team goals & willingness to work hard to achieve the goals Competency The right set of skills needed to get the job done & help accomplish the team’s goals Communicati on Can share ideas with others in both oral & written form Cooperation Works well with others, knows they won’t always get their way, & is willing to accept the decision of the group Creativity Able to look at things from different perspectives & suggest new ways of doing things 11

Dis/Advantages of Entrepreneurship AdvantagesDisadvantages Entrepreneurs are their own bosses Entrepreneurs can choose a business that interests them Entrepreneurs can be active Entrepreneurs can make large sums of money Entrepreneurship is risky Entrepreneurs face uncertain and irregular incomes Entrepreneurs work long hours Entrepreneurs must make all decisions by themselves 12

Problem Solving Model Step 6: Evaluate the Action Evaluate your action to determine how well your solution worked. Ex: After 6 mons, Dan evaluated if his business is achieving his financial and non financial goals. Step 5: Take Action Take action to implement the best solution. Ex: Dan begins to putting together a business plan and spreading the word about his new venture. Step 4: Evaluate Alternatives and Select the Best Option Qualify (figure out how much it is worth to you) or simply rank each alternative. Ex: Dan wants to be his own boss so he ranks working for a website design company last, he would rather pursue website design so he ranks that second, and decides to open his own website design company. Step 3: Identify Various Solutions Identify all possibilities before you settle on a particular solution. Ex: Dan comes up with several possible solutions like work as a website designer for another company, pursue his interests in the food industry, & start his own website design company. Step 2: Gather Information Relevant info may be obtained from many sources, including company records, industry data, trade magazines, and interviews with other industry people. Ex: It would he helpful for Dan to do a self assessment to determine his strengths & weaknesses, skills, experience, speak to an industry professional, and refer to a trade magazine. Step 1: Define the Problem Write down what the problem is and why it is a problem. Ex: Should Dan Parker start a website design company? 13

Problem Solving Skills Communicate ◦In order to solve problems, you may have to ask questions, request information, and express your ideas and opinions. Brainstorming ◦A creative problem-solving technique that involves generating a large number of fresh ideas; often done in a group setting. ◦The point of brainstorming is not to judge your ideas as good or bad but to come up with as many ideas as possible. Learn from Mistakes ◦View your mistakes as a learning experience 14