Unit 1: What is an Entrepreneur?

1. Unit 1: What is an Entrepreneur?

2. Learning Objectives Section 1: What is Entrepreneurship? • Define what it means to be an entrepreneur • Compare the pros and cons of being an entrepreneur • Identify successful entrepreneurs and their achievements • List key characteristics and skills of an entrepreneur

3. What is Entrepreneurship? Entrepreneur vs. Employee • What is an Entrepreneur? • Someone who creates and runs a business • What is an Employee? • A person who works in a business owned by someone else

4. Facts About Small Business • The Small Business Administration (SBA) defines a small business as having less than 100 employees, or 500 employees for manufacturing companies • Small firms employ about half of the U.S. private work force • Create around 64% of all new jobs • According to the SBA, over 600,000 new businesses are started in the U.S. every year—and about 500,000 close

5. Why Be an Entrepreneur? Pros Cons Potential Failure Unexpected Obstacles Financial Insecurity Longs Hours and Hard Work Other Cons • Make your own rules • Doing work you enjoy • Creating greater wealth • Helping your community • Other Pros

6. What does it take to be an Entrepreneur? Characteristics Skills Business Savvy Communication Computer Decision-Making Problem-Solving Mathematical Organizational People • Courage • Creativity • Curiosity • Determination • Discipline • Empathy • Enthusiasm • Flexibility • Honesty • Patience • Responsibility

7. Self-Test Results Discuss Entrepreneur Self-Test Results and Reflections

8. Learning Objectives Section 2: Entrepreneurship and the Economy • Describe an economic system • Identify different economic systems • Examine supply and demand relationships • Explore the role of competition in a market economy • Define global economy • Identify factors that affect entrepreneurs in international trade • Describe relationships between the global and local economy

9. What is an Economic System? Economics • (Fancy Definition) A social science concerned with how people satisfy their demands for goods and services when the supply of those goods and services are limited • What does it really mean? • In simple terms, Economics studies the flow of goods and services between people (i.e. Customer-to-Customer, Business-to-Business, Business-to-Customer) • Why is it referred to as a social science? • Because people play the central role in it. People decide how goods and services should be used and how they will be distributed within a society

10. Needs/Wants • Economics also looks at the needs/wants of people in a society • What are some examples of needs? • Food, clothing, shelter, etc. • What are some examples of wants? • TV, car, iPhone, iPad, computer, etc. • When the demand for goods and services (needs/wants) is larger than the supply provided is referred to as what? • Scarcity

11. Economic Systems Economic System (economy) • A method used by a society to allocate goods and services among its people to cope with scarcity • What factors affect the kinds of economic systems used in a society? • Political, Moral, and Cultural • Before deciding on the type of economic system, four questions must be answered:

12. Types of Economic Systems • There are three main types of economic systems: • Command Economy • The government controls the production, allocation, and prices of goods and services • Examples: China, Russia, Syria, Iran, Haiti, Cuba, and a few more • Market Economy (aka Free Enterprise System or Capitalism) • Suppliers and consumers control the production, allocation, and prices of goods and services • Examples: U.S., Canada, Australia, Hong Kong, Singapore, etc. • Mixed Economy • Blends elements of the command and market economies All modern economies are actually considered mixed, however most countries lean so strongly toward one or the other they are referred to as command or market

13. Supply and Demand • Supply • Quantity of goods and services a business is willing to sell at a specific price and a specific time • Demand • Quantity of goods and services consumers are willing to buy at a specific price and specific time • In a market economy, suppliers control supply and consumers control price. Why? • What do you consider to be the best price for a product? • The highest price the customer is willing to pay

14. Supply and Demand Surplus • Supply Curve • Shows the quantity of a product or service a supplier is willing to sell across a range of price over a specified period of time Shortage

15. Supply and Demand • Demand Curve • Shows the quantity of a product or service consumers are willing to buy across a range or prices over a specified period of time

16. Supply and Demand • Equilibrium Point • The point at which the supply curve and demand curve intersect.Also referred to as the perfect balance between supply and demand.

17. The Global Economy • Global economy refers to the flow of goods and services around the whole world • Two ways to move goods and services throughout the world: • Export • Business activity in which goods and services are sent from a country and sold to foreign customers • Import • Business activity in which goods and services are brought into a country from foreign suppliers

18. International Trade • Governments are often protective of the resources within their borders. Why? • Most nations want to give their domestic businesses a competitive advantage over foreign ones selling the same product or service • Governments want to protect their consumers from foreign goods that might be unsafe or of poor quality • How do governments restrict international trade? • Through the use of trade barriers: • Tariff – a tax that importers must pay on the goods they import • Quota – a limit on the quantity of a product that can be imported into a country • Embargo – a complete blockage of trade with another country

19. Learning Objectives Section 3: Types of Business and Business Ownership • Identify the four main types of business • Examine trends in business startups • Explore growth expectations for business • Define liability • Examine sole proprietorships • Learn about partnerships • Examine corporations • Understand cooperatives

20. Types of Businesses • Businesses are divided into four broad categories, depending on their primary function: • Manufacturing Business – converts materials into goods suitable for use and then sells those goods to others • Wholesaling Business – buys goods in large quantities and resells them to retailers • Retailing Business – buys goods from wholesalers and sells them to consumers • Service Business – provides services to customers for a fee

21. Forms of Business Ownership • Sole Proprietorship • Partnership • Corporations • C Corporation • Subchapter S Corporation • Limited Liability Corporation • Nonprofit Corporation • Cooperative • Franchise