Objective 3.01: Factors Influencing Entrepreneurship This also combines 2.01

Entrepreneurship?

What is Entrepreneur? A person who _________ the risk of starting and operating a business for the purpose of making a ________.

A Raleigh Entrepreneur’s Story

Characteristics of Entrepreneurs

Goal Oriented Work hard to achieve ______ results.

Knowledgeable __________ and well ____________.

Good Planning Skills Can decide __________________ how to do something before starting.  

Calculated Risk Taker Good at ______________ the benefits against the costs in order to be successful.

Innovative Find ways to _____________ and produce better work and gain the confidence of __________.

Responsible Accept the ____________ of decisions.

Acquiring a Business…

1. Take over a family business Do you have the ability to work for a member of your ____________? Do you get along with members of your family who will be ____________ with the business? Do you share the same _________ for the business? Can you leave the business __________at work when you go home?

2. Buy an existing business Good _____________ if you do not have a great deal of business experience. May be less __________ because it is already established. Will you keep the current _________ and _____________of the business or change?

3. Start your own business Do I have the motivation and persistence to start from the “ground up”? Do I have sufficient knowledge of basic operations to undertake the business in which I am interested? Do I have enough financial resources to start from “ground up?”

Types of Businesses

1. Sole Proprietorship

Sole Proprietor Advantages Disadvantages START UP: Easy PROFITS: to owner TAXES: Business pays no taxes – all taxes are paid through the owner’s individual taxes GOV REG: Limited government regulations CONTROL: Direct control LIABILITY: Unlimited for owner CAPITAL: Difficult to finance DISSOLUTION: Limited life (death of owner usually equals death of business)

2. Partnership _______ or more owners

Partnership Advantages Disadvantages PROFITS: Shared START UP: Easy LIABILITY: Unlimited for partners CAPITAL: Difficult to finance DISSOLUTION: Limited life (death of partner may mean end of partnership) CONTROL: Shared START UP: Easy TAXES: Business pays no taxes – all taxes are paid through the owners’ individual taxes GOV REG: Limited government regulations

3. Corporation Owned by ______________

Corporations Disadvantages Advantages START UP: Expensive to form PROFITS: Profits depend on size of investment TAXES: Double taxation (on income of corporation and shareholders pay taxes on dividends) GOV REG: High government regulation CONTROL: Lack of control by owners (CEO makes decisions) LIABILITY: Limited liability CAPITAL: Ease in raising capital $$$$ DISSOLUTION: Continuous existence; ownership transferred through sale of stock

4. Franchise Entrepreneurs purchase the rights to open and run a location of a larger company.

Franchise Disadvantages Advantages START UP: Training and guidance provided; an established national name; reduced risk of failure LIABILITY: Liability is limited DISSOLUTION: Continuous existence PROFITS: Percentage of sales goes to Franchiser CAPITAL: Cost to purchase is high TAXES: similar to corporations GOV REG: High CONTROL: Lack of freedom in running business