Rewards and Challenges of Entrepreneurship Chapter 5, Section 1.

Rewards and Challenges of Entrepreneurship

Chapter 5, Section 1

Entrepreneurship

EntrepreneurEntrepreneur- A person who recognizes a business opportunity

and organizes, manages, and assumes the risks of starting and operating a business.

EntrepreneurshipEntrepreneurship- The process of recognizing an opportunity, testing

it in the market, and gathering the resources necessary to go into business.

Entrepreneurship (cont.)

A ventureventure is a new business undertaking that involves risk.

All entrepreneurs must be willing to take risks.

Personal Characteristics of Entrepreneurs Persistent

Willing to work until a job is done, no matter how long it takes

Risk-taking Take risks, but they are not reckless

Self-confident Believe in themselves

Personal Characteristics of Entrepreneurs Restless

Once entrepreneurs achieve their goals, they start looking for new challenges

Goal-oriented Set and achieve goals

Action-oriented Doers instead of spectators; They take action.

Personal Characteristics of Entrepreneurs Responsible

Take responsibility for their decisions and action Self-demanding

High expectations Creative

Look for new ways to solve old problems

Personal Characteristics of Entrepreneurs Independent

Want to make their own decisions Inquisitive

Conduct research and ask questions to solve problems

Enthusiastic Energetic and passionate about their pursuits

Small Business

SBA Government agency that protects the interests of

small businesses. www.sba.gov A small businesssmall business is an independently owned

business that usually has the owner as its manager.

Internet Business

Virtual businessVirtual business or dot-com companydot-com company-a business that operates on the Internet.

Makes shopping easier. Have the potential to

attract huge numbers of customers.

Rewards of Entrepreneurship

Being the boss This is the main reason people become

entrepreneurs. Doing what you enjoy Having the opportunity to be creative Building an enterprise Develop own schedule

Challenges for Entrepreneurs Obtaining funds to start the business

This is one of the biggest obstacles. Being fully responsible for the business Feeling alone and insecure about making

right decisions Work long hours Face uncertain income levels

The Impact of Small Business More than 99% of U.S. firms are small

businesses. Small businesses employ more than 50% of

the U.S. workforce. A majority of small businesses are one-

person operations that generate more than half the nation’s income.

Business Failure

About four out of five small businesses fail in their first five years.

Most failures are due to inadequate financial planning and management.