Intro Bus - Lesson 5.1 - Becoming an Entrepreneur

Poll

Do you think all business owners are entrepreneurs?

• Yes

• No

​Characteristics of Entrepreneurs

Entrepreneur

someone who takes a risk in starting a business to earn a profit​

​

​Entrepreneurship

the process of starting, organizing, managing and assuming the

responsibility for a business.​

​

Not all business owners are entrepreneurs.​

​

​

Open Ended

What are some personal characteristics that you think all successful entrepreneurs have? Name one.

• ​problem-solving skills

• tolerance for ambiguity

• strong integrity

• personal initiative

• ability to secure resources

• capability to learn from failure

• willingness to work hard.​

​They have

• ​persistent

• inquisitive

• energetic

• goal oriented

• independent

• self-confident

• creative

• relable

• competitive​

​Entrepreneurs are more

​Personal Characteristics of Successful Entrepreneurs

Open Ended

What are some ways you think you could learn to run a business? List one.

​Entrepreneurship and the Economy

• Nearly 1 in 10 of all Americans aged 18-64 is involved in some type of entrepreneurship activity

• Over 500,000 new business are created annually

• Nearly as many small businesses close as begin each year.​

​Entrepreneurship and the Economy

Employment in New Businesses

• about 40% of new business owners run their own businesses with no help

• another 41% hire only 1-5 employees

• appr​oximately 11% hire 6-9 employees

• about 8% hire 20 or more employees

​Entrepreneurship and the Economy

Financing​

• most of the money needed to start a new business comes from the entrepreneur and his or her family and friends

• 1 in 5 Americans has invested in a business of someone they know well

  • 50% lend support to a family member or relative

  • 29% give money to neighbors and friends

  • 8% invest in businesses started by work colleagues

​Entrepreneurship and the Economy

​Other Sources of Financing

• Venture Capital​ - money provided by large investors to finance new products and new businesses that have a good chance to be very profitable

​

• Loans from Banks and Financial Institutions

  ​

• Credit given by businesses that sell products and services to the new business​

​

​Entrepreneurship and the Economy

​Productivity

• Businesses with just a single owner and no staff account for over $600 billion in sales annually.

• Small businesses are responsible for nearly half of the U.S. GDP each year

• Small businesses account for 55% of all innovative products and services developed​

Multiple Choice

Which of the following is NOT a characteristic of entrepreneurship in the U.S.?

• About 3% of people aged 18-64 are involved in entrepreneurship activity.

• About 500,000 new businesses are created each year.

• 40% of new businesses have no employees.

• One in every five Americans has invested in a business of someone who they know well.

Multiple Choice

Money provided by large investors to finance new products and new businesses that have a good chance to be very profitable is known as

• a loan

• credit

• venture capital

• start-up funding

​Opportunities and Risk

When deciding to start ​a new business entrepreneurs have to weigh the risks against the opportunities and resulting rewards.

Open Ended

What do you think some of the rewards of starting a new business are?

​New Business Opportunities

• Innovation - ​an invention or creation that is brand new

  • Creation of new services that become the basis for a business

• Improvement - a designed change that increase the usefulness of a product, service, or process

  • ​Improving the design, making more effective procedures, or greater attention to quality to improve a product or service

Open Ended

What do you think are some of the risks of starting a new business and reasons why a new business may fail? Give one reason.

Multiple Choice

What percentage of new businesses do you think are profitable?

• 20%

• 33%

• 50%

• 65%

Multiple Choice

What percentage of new businesses do you think are discontinued within 10 years?

• 25%

• 33%

• 50%

• 75%

​Risks of Starting a New Business

• More new businesses fail than succeed.​

  • about 1/3 are successful

  • about 1/3 do not make a profit, but stay in business

  • about 1/3 lose money

• ​Well over 50% of all new businesses are discontinued within ten years

​Primary Reasons that Businesses Close

• ​Lack of adequate capital

• Low sales

• Higher than expected expenses​

• Competitive pressure

• An owner unprepared to manage a growing business

• Operations requiring more time than the owner is willing to commit​