Becoming an Entrepreneur Chapter 6-1
What is an Entrepreneur? • An entrepreneur is someone who takes a risk in starting a business to earn a profit. • Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business.
What does it take? • Not all people who own or manage a business are entrepreneurs. It takes unique skills and personal characteristics to develop a new idea for a product or service. • Entrepreneurs are: • Persistent • Creative • Inquisitive • Energetic • Goal-oriented • Independent • Reliable • Competitive
Entrepreneurship and the Economy • Nearly one in ten of all Americans 18 to 64 years old are involved in some type of entrepreneurship activity. • Over 500,000 new business are created annually. • Nearly as many small businesses close each year.
Financing • Most of the money needed to start a new business comes from the entrepreneur and his or her family and friends. • Venture Capital is money provided by large investors to finance new products and new businesses. • Other sources of financing include loans from banks and other institutions and credit.
Opportunities and Risks • The opportunities for prospective entrepreneurs begin with the creation of new or improved products and services. • Innovation is an invention or creation that is brand new • Improvement is a designed change that increases the usefulness of a product, service, or process
Reasons Why New Businesses Fail • Lack of adequate capital • Low sales • Higher than expected expenses • Competitive pressure • Owner unprepared • Operations requiring more time than expected