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1.01 Economic Systems and Environments in which Businesses Function

1.01 Economic Systems and Environments in which Businesses Function. What is an Entrepreneur?. Webster’s Dictionary 1. a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk. 2. an employer of productive labor; contractor.

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1.01 Economic Systems and Environments in which Businesses Function

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  1. 1.01 Economic Systems and Environments in which Businesses Function

  2. What is an Entrepreneur? Webster’s Dictionary • 1. apersonwhoorganizesandmanages any enterprise, especially a business,usuallywithconsiderable initiative and risk. 2. an employer of productive labor; contractor. • Someone who has the passion and courage to turn a concept that gives them joy into a business and is willing to take the necessary actions to achieve their desired goals.

  3. Great Entrepreneurs • Benjamin Franklin - America’s first entrepreneur. A popular author, a printer, an inventor (the lightning rod, bifocals) and a very savvy businessman who knew how to commercialize the fruits of his fertile mind.

  4. Great Entrepreneurs (cont.) • Thomas Edison - the electric light, the phonograph, talking motion pictures and more than 1,300 other patented inventions? • Henry Ford - changed human lifestyles by making available a vehicle, the Model T, that vastly extended people’s range of movement. • Ray Kroc - he had bought out the McDonald brothers, Kroc proceeded to take their concept of a limited menu, fast service and low prices and expand it nationally, in the process creating the fast-food industry and dramatically affecting America’s lifestyle and, sadly health.

  5. Great Entrepreneurs (cont.) • P.T. Barnum - He played on our fascination with the bizarre and freakish with sideshow acts ranging from the midget Tom Thumb to Jumbo the giant elephant. “the Greatest Show on Earth.”

  6. What is your definition of an entrepreneur?

  7. What is a Small Business? SBA defines a small business concern as one that is independently owned and operated, is organized for profit, and is not dominant in its field. • Maximum number of employees may range from 100 to 500 • Annual receipts may not exceed $2.5 to $21.5 million.

  8. Abercrombie & Fitch • Nintendo • Gucci • Hasbro • Ferrari • Corning • DuPont • IBM • John Deere • Sony • Tiffany & Co. Small Businesses that became Famous

  9. Small Business Entrepreneurial Ventures • Sometimes “mom and pop” businesses • Create jobs for themselves • Examples: Shoe repair shop, Accountants, Lawyers • Start a business to be innovative, grow the venture, and create value. • May start as a small business but has great potential to grow. • Examples: Domino’s Pizza, Blockbuster Entertainment, The Gap Small Business vs. Entrepreneurial Ventures

  10. What helps small businesses be successful? • Planning – learn how to build a successful new business and assemble a team that has the expertise they need. • Network - build relationships with key peers, mentors, and advisors. • Customers - Understanding the customers wants and needs, focus on what you can do to make their lives better.

  11. What helps small businesses be successful? (cont.) • Know your Strengths and Weaknesses • Adaptability - adapt to changing situations. Being flexible allows us to respond to changes without being paralyzed with fear and uncertainty • Opportunity Focused - Every problem has an opportunity. • Productivity – find ways to make your business more productive. Productivity can be enhanced by technology, automation, outsourcing, and improving business processes.

  12. What helps small businesses be successful? (cont.) • Balanced Lifestyle - It's easy to allow the business to take control of your life. Balance all aspects of your life business and personal.

  13. Barriers to Small Business/Entrepreneurial Growth • The Owner – You are busy running your business yet you need to devote time to helping it grow. One way to do this is delegate some of your work. • People – make sure your find the right people to work for you and then define their job responsibility, the authority, the job duties and, most important, your expectations.

  14. Barriers to Small Business/Entrepreneurial Growth • Money- Growing your business takes a great deal of money to accomplish. Determine how much money you will need, and create a budget. Then talk to your banker, family and friends, private investors or consider funding the growth yourself. • Customers – you will need to acquire new customers while providing superior customer service for your current customers.

  15. Barriers to Small Business/Entrepreneurial Growth • Information Overload – As your company grows, so will the information you receive. Make sure the information is good by asking is it… • Correct means that the data has been checked and verified before it goes into your systems. • Current means the data is up to date. • Consistent means that the data is stored in only one place.

  16. Barriers to Small Business/Entrepreneurial Growth • Processes – Simple document the processes of your business. Choose a consistent format; for example: • Purpose of the process • General description • Sequence of steps • Examples • Planning - Philip Orsini, entrepreneur and writer, wrote in his book Successful Business Expansion “Companies don’t fail because they grow. They fail because they don’t plan their growth.”

  17. How do Small Businesses Contribute to Society? • Donations for charitable purposes. • Charitable institutions set up by the business for educational, medical and vocational training to provide the less privileged with benefits which they normally cannot afford. • Provides jobs and increases economic growth.

  18. How do Small Businesses Contribute to Society? • Small firms:•    Represent 99.7 percent of all employer firms.•    Employ half of all private sector employees.•    Pay 44 percent of total U.S. private payroll.•    Generated 65 percent of net new jobs over the past 17 years.•    Create more than half of the nonfarm private GDP.•    Hire 43 percent of high tech workers ( scientists, engineers, computer programmers, and others).•    Are 52 percent home-based and 2 percent franchises.•    Made up 97.5 percent of all identified exporters and produced 31 percent of export value in FY 2008.•    Produce 13 times more patents per employee than large patenting firms.Source: U.S. Dept. of Commerce, Census Bureau and Intl. Trade Admin.; Advocacy-funded research by Kathryn Kobe, 2007 (www.sba.gov/advo/research/rs299.pdf) and CHI Research, 2003 (www.sba.gov/advo/research/rs225.pdf);U.S. Dept. of Labor, Bureau of Labor Statistics.

  19. Sources • http://www.evancarmichael.com/Business-Coach/740/Seven-Barriers-to-Business-Growth.html • http://www.paggu.com/entrepreneurship/top-5-contributions-of-entrepreneurship-in-society/

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