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A Perspective on EntrepreneurshipChapter 1

+ENTREPRENEURSHIP

an important component of a capitalist economy

thrives in economic systems that support innovation and hard work

Entrepreneurs = success = nation

+Entrepreneurship and Economic Development

Human Resources Natural Resources

Capital Formation Technology

Economic Developme

nt

+Entrepreneurship

It refers to the economic activity of a person who starts, manages, and assumes the risk of a business enterprise

Entrepreneur – is the person who undertakes entrepreneurial activities

+Entrepreneur

Economic Needs

Business Solution

Resources

Takes the Risk

+Entrepreneur’s Concern

Problem at Hand Entrepreneur’s Action

1. Identifying an economic need

2. Assembling resources

3. Assuming risk

High income families are not satisfied with the services provided by high schools in the area

Resources must be made available

Venture must be made

Establish a high standard school for high school students

Acquire funds, hire people, construct buildings and the like.

Prepare project study, advertise, maintain good relationship with employees and customers, among others.

+Entrepreneur’s Task

Products and services for customer’s and producers;

Employment; Taxes Demand and supplies’ products and services;

and Training facilities for future entrepreneurs

+ Entrepreneur

LAND LABOR

Entrepreneur

Production Process

Finished Goods and Services

CAPITAL

+Entrepreneurship and Innovation Innovation – introduction of a new method,

procedure, custom, device, among others. Innovation

INVENTION – discovery or devising of new products and processes;

DEVELOPMENT – which refers to the process by which the ideas and principles generated from the stage of invention , modified into a new product;

INNOVATION – an introduction of new product

+ACTIVITY: INNOVATION

PRODUCT NAME DESCRIPTION OF THE PRODUCT TAGLINE SHORT COMMERCIAL LOGO

+Common Pitfalls for New Enterprises Improper pricing Lack of knowledge about product costing Inability or unwillingness to plan Poor communication among the management

team Domestic pressures distracting the owner/

manager Poor retail location Lack of discipline Dishonesty

+New Ventures and Long – Term EnterprisesFour Stages

A. Venture Idea (prestart-up stage) happens when the entrepreneur starts to

question the feasibility of an idea, product, or service.

“What will the business make or sell?” May be derived from a recognition of

opportunities

+1. An old type of business can be given a new twist or professionalized.Example: In the food business,

entrepreneurs have reinforced the practice of having chef cook in front of customers to attract people who like to smell and see what is cooking

+Product with a twist

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2. A standard product or service can be customized.

Computer technology has been used to create products ranging from bathing suits tailored to fit the individual to birthday records containing the recipient's name.

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3. New technology can be adapted to manufacture an old product

Entrepreneurs have created a number of businesses that use desktop publishing and laser printers to turn out printed materials much cheaper.

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4. Imported products can be replaced by domestic production

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5. Business operations can be internationalized

+SEATWORK (1/4) : Think of a product or services that can spring up from the following:1 Scientific Invention: ________________________2 New Government Program:

____________________3 Hobbies and personal interests:

______________4 A love for food: _____________________________5 Running a household:

________________________

+Venture ideas through the following:Market Research

It is an organized way of finding objective answers to the questions every business must answer to improve its chances of success.

InformationDemographics

+New Ventures and Long – Term Enterprises (continuation – FOUR STAGES)

B. Start – Up Stage – Formation of the business; Generation of necessary capital; Purchase of facilities and equipment; Constructing prototypes Testing the market Consider our first customer, first sales,

build for survival

+1. Marketing Strategy – overall plan what product to offer and to sellProduct CustomerPricingAdvertising and PromotionDistribution and sales management

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2. People Skills3. Location Strategy4. Financing Strategy5. Internal Management

Essentials

+New Ventures and Long – Term EnterprisesC. Early growth stage – establishing feasibility; selling to limited markets with limited resources

DevelopmentBuilding of human resourcesGradual build- up of valuable assetsManagement control system

+New Ventures and Long – Term EnterprisesD. Late Growth Stage – management is structured; long term financing is established, and facilities planning are undertakenExpansionExportingFranchising

+Rewards for Successful EntrepreneurshipFactors of Production

Economic Reward Limiting Factor for Rewards Received

Land

Capital

Labor

Entrepreneur

Rent

Interest

Wages/ salary

profits

Supply and demand

Industry rates/ government mandated rates

Supply and demand legislation

Skill of entrepreneur

+The Entrepreneur’s Predicament(embarrassing situation)

+Entrepreneurship and Business Size