Chapter 1 What is Entrepreneurship Entrepreneurship Economy l

Chapter 1 What is Entrepreneurship?

Entrepreneurship & Economy l • Entrepreneur- an individual who takes on the creation, organization, and ownership of a business. Entrepreneurship- the process of recognizing an opportunity for a business venture

Small Business Owners l In U. S. economy 90% of all businesses are small business ventures.

Economic System • What is produced? • How is it produced? • How much is produced? • Who is using the production?

What affects our economy? l Our Laws Institutions l Activities l • Federal Reserve Entrepreneurship Activities (new business growth) War Consumer spending

History of Economic Systems l l Traditional • Bartering and farm trade • Based on supply and demand (little gov’t intervention • • Strong industrial trade (strong gov’t intervention) Ex: _Soviet Union/Cuba • • Combine principles of market and command economics Ex: United States and England (socialist&capitalist) Pure Market System Command Mixed system

Free Enterprise System l l l Capitalistic societies have this type of economic system Gives economic choices to people Other names • Market economy • capitalism

Free Enterprise System con’t l Main Characteristics • Make a profit • Competition between similar businesses • System has a market structure-nature and degree of competition

Economic Indicators l l l Gross National Product Employment Rate Consumer Confidence

Business Cycle l Includes all the ups and downs of the economy for a period of time • Growth and prosperity • Recession • Recovery

What Entrepreneurs Contribute l l l Help to turn demand into supply-recognize wants and seize the opportunities Entrepreneurs supply money to the economyseek venture capital Provide jobs Can change society ex: Apple PC Catalyst for future expansion ex: Bill Gates

Small Business vs Entrepreneurs l l All small businesses can be entrepreneurs Not all entrepreneurs have small businesses

6 Types of Entrepreneurial Business l l Manufacturing- actually produce the products they sell Wholesaling- sell the products to people other than the final customer l Retailing- selling products to people l Service- sell services

6 Types of Entrepreneurial Businesses cont’d l Agricultural- generate fresh produce & other farm products l Mining & extractingtake resources like coal out of the ground so they can be consumed

Small Businesses Employ fewer than 20 people!

Advantages of Entrepreneurship l They are their own boss l They can choose a business that interest them l They can be creative l They can make lots of money

Disadvantages of Entrepreneurship l Entrepreneurship is risky l Entrepreneurs face uncertain an irregular incomes l Entrepreneurs work long hours l Entrepreneurs must make all decisions by themselves

THINK CRITICALLY!! l Entrepreneurs can fail even if they are committed and have the characteristics needed to be successful. Why do you think this can happen? l Why is it important for entrepreneurs to choose a field that they will enjoy? l Do you think the advantages of entrepreneurship outweigh the disadvantages? Why or why not?

The principle goals of most entrepreneurs are to prosper and be innovative