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Business Chapter 8

Business Chapter 8. Chapter 8 section 1 Entrepreneurs- is profit seeker who develops a new product or process and assumes the risk of profit or loss.

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Business Chapter 8

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  1. Business Chapter 8 • Chapter 8 section 1 • Entrepreneurs- is profit seeker who develops a new product or process and assumes the risk of profit or loss. • E.g. Bill Gates, Donald Trump, Dr. Dre, Shakira, Jay Z, Jennifer Lopez, Beyonce, P-Diddy or Sean John Combs, Russell Simmons, David Beckham, Paris & Nicole Hilton, &The Walton “Sam’s Club & Wal-mart.”, Mom & Dad.

  2. An Entrepreneur • Comes up with an idea, turns that idea into a marketable product, accepts the risks of success or failure, and claims any resulting profit or loss.

  3. Entrepreneurs and Creative Change. • 1. Introduce New Products. • 2. Improve Quality of Existing products. • 3. Introduce New Production Methods. • 4. Introduce New Ways of Doing Business.

  4. Financing the Business • Business need money to begin and run the business. • They must acquire the necessary resources, including hiring employees and buying supplies. • Financial Capital, that is the money needed to start or expand the business. • Financial capital may be obtained through bank loans or from venture capitals.

  5. continued • Venture Capitalist – individuals or companies that specialize in financing start-up firms. • Profit Attracts Competitors. • Entrepreneurs may earn profit in the short run. It is in the long run that attracts competitors and substitutes. • Other businesses will enter the market and try to duplicate the success of the original entrepreneur. • Competitors try to offer a better product or a lower price. • The remain in the long run.

  6. Who isn’t an Entrepreneur? • People may carry out just one of the functions of an entrepreneur. • They may dream up a new product or process, they may dream up a new product or process.

  7. Invention, Innovation, and Entrepreneurs • Innovation is the process of turning an invention into a marketable product. • Inventors are entrepreneurs if they bear the risk of success or failure. • Most inventors work for firms as paid employees. • Pfizer, Dow chemical, or Intel. Apple • Intrapreneurs, are paid even in years when their creative juices slow down.

  8. Managers and entrepreneurs • Most entrepreneurs do more than simply sell their goods ideas to others. • They try to bring their ideas to the market by paying resource owners for the right to control these resources in the business.

  9. Stockholders and Entrepreneurs • In the USA 50,000,000. • Corporation fails, stock holders could lose the amount they paid for that particular stock. • If the corporation thrives, the stock value will increase and stock holders will benefit.

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