Business Chapter 8  Chapter 8 section 1  Entrepreneurs- is profit seeker who develops a new product or process and assumes the risk of profit or loss.  E.g. Bill Gates, Donald Trump, Dr. Dre, Shakira, Jay Z, Jennifer Lopez, Beyonce, P- Diddy or Sean John Combs, Russell Simmons, David Beckham, Paris & Nicole Hilton, &The Walton “Sam’s Club & Wal-mart.”, Mom & Dad.

An Entrepreneur  Comes up with an idea, turns that idea into a marketable product, accepts the risks of success or failure, and claims any resulting profit or loss.

Entrepreneurs and Creative Change.  1. Introduce New Products.  2. Improve Quality of Existing products.  3. Introduce New Production Methods.  4. Introduce New Ways of Doing Business.

Financing the Business  Business need money to begin and run the business.  They must acquire the necessary resources, including hiring employees and buying supplies.  Financial Capital, that is the money needed to start or expand the business.  Financial capital may be obtained through bank loans or from venture capitals.

continued  Venture Capitalist – individuals or companies that specialize in financing start-up firms.  Profit Attracts Competitors.  Entrepreneurs may earn profit in the short run. It is in the long run that attracts competitors and substitutes.  Other businesses will enter the market and try to duplicate the success of the original entrepreneur.  Competitors try to offer a better product or a lower price.  The remain in the long run.

Who isn’t an Entrepreneur?  People may carry out just one of the functions of an entrepreneur.  They may dream up a new product or process, they may dream up a new product or process.

Invention, Innovation, and Entrepreneurs  Innovation is the process of turning an invention into a marketable product.  Inventors are entrepreneurs if they bear the risk of success or failure.  Most inventors work for firms as paid employees.  Pfizer, Dow chemical, or Intel. Apple  Intrapreneurs, are paid even in years when their creative juices slow down.

Managers and entrepreneurs  Most entrepreneurs do more than simply sell their goods ideas to others.  They try to bring their ideas to the market by paying resource owners for the right to control these resources in the business.

Stockholders and Entrepreneurs  In the USA 50,000,000.  Corporation fails, stock holders could lose the amount they paid for that particular stock.  If the corporation thrives, the stock value will increase and stock holders will benefit.