+ A Perspective on Entrepreneurship Chapter 1

+ ENTREPRENEURSHIP an important component of a capitalist economy thrives in economic systems that support innovation and hard work Entrepreneurs = success = nation

+ Entrepreneurship and Economic Development Human ResourcesNatural Resources Capital FormationTechnology Economic Development

+ Entrepreneurship It refers to the economic activity of a person who starts, manages, and assumes the risk of a business enterprise Entrepreneur – is the person who undertakes entrepreneurial activities

+ Entrepreneur Economic Needs Business Solution Resources Takes the Risk

+ Entrepreneur’s Concern Problem at HandEntrepreneur’s Action 1.Identifying an economic need 2.Assembling resources 3.Assuming risk High income families are not satisfied with the services provided by high schools in the area Resources must be made available Venture must be made Establish a high standard school for high school students Acquire funds, hire people, construct buildings and the like. Prepare project study, advertise, maintain good relationship with employees and customers, among others.

+ Entrepreneur’s Task Products and services for customer’s and producers; Employment; Taxes Demand and supplies’ products and services; and Training facilities for future entrepreneurs

+ EntrepreneurLANDLABOREntrepreneur Production Process Finished Goods and Services CAPITAL

+ Entrepreneurship and Innovation Innovation – introduction of a new method, procedure, custom, device, among others. Innovation INVENTION – discovery or devising of new products and processes; DEVELOPMENT – which refers to the process by which the ideas and principles generated from the stage of invention, modified into a new product; INNOVATION – an introduction of new product

+ ACTIVITY: INNOVATION PRODUCT NAME DESCRIPTION OF THE PRODUCT TAGLINE SHORT COMMERCIAL LOGO

+ Common Pitfalls for New Enterprises Improper pricing Lack of knowledge about product costing Inability or unwillingness to plan Poor communication among the management team Domestic pressures distracting the owner/ manager Poor retail location Lack of discipline Dishonesty

+ New Ventures and Long – Term Enterprises Four Stages A. Venture Idea (prestart-up stage) happens when the entrepreneur starts to question the feasibility of an idea, product, or service. “What will the business make or sell?” May be derived from a recognition of opportunities

+ 1. An old type of business can be given a new twist or professionalized. Example: In the food business, entrepreneurs have reinforced the practice of having chef cook in front of customers to attract people who like to smell and see what is cooking

+ Product with a twist

+ 2. A standard product or service can be customized. Computer technology has been used to create products ranging from bathing suits tailored to fit the individual to birthday records containing the recipient's name.

+ 3. New technology can be adapted to manufacture an old product Entrepreneurs have created a number of businesses that use desktop publishing and laser printers to turn out printed materials much cheaper.

+ 4. Imported products can be replaced by domestic production

+ 5. Business operations can be internationalized

+ SEATWORK (1/4) : Think of a product or services that can spring up from the following: 1 Scientific Invention: ________________________ 2 New Government Program: ____________________ 3 Hobbies and personal interests: ______________ 4 A love for food: _____________________________ 5 Running a household: ________________________

+ Venture ideas through the following: Market Research It is an organized way of finding objective answers to the questions every business must answer to improve its chances of success. Information Demographics

+ New Ventures and Long – Term Enterprises (continuation – FOUR STAGES) B. Start – Up Stage – Formation of the business; Generation of necessary capital; Purchase of facilities and equipment; Constructing prototypes Testing the market Consider our first customer, first sales, build for survival

+ 1. Marketing Strategy – overall plan what product to offer and to sell Product Customer Pricing Advertising and Promotion Distribution and sales management

+ 2. People Skills 3. Location Strategy 4. Financing Strategy 5. Internal Management Essentials

+ New Ventures and Long – Term Enterprises C. Early growth stage – establishing feasibility; selling to limited markets with limited resources Development Building of human resources Gradual build- up of valuable assets Management control system

+ New Ventures and Long – Term Enterprises D. Late Growth Stage – management is structured; long term financing is established, and facilities planning are undertaken Expansion Exporting Franchising

+ Rewards for Successful Entrepreneurship Factors of Production Economic RewardLimiting Factor for Rewards Received Land Capital Labor Entrepreneur Rent Interest Wages/ salary profits Supply and demand Industry rates/ government mandated rates Supply and demand legislation Skill of entrepreneur

+ The Entrepreneur’s Predicament (embarrassing situation)

+ Entrepreneurship and Business Size