Characteristics of Entrepreneurs

An entrepreneur is someone who takes a risk in starting a business to earn a profit.

Must have a developed initial plan and desire to be your own boss

Innovation and special skills are also necessary

Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business.

What Does it Take? Not all business owners are

entrepreneurs Must have confidence and capability to

turn an idea into a business Come from all genders, ages, ethnic

groups (more are male but more even for young ent.).

Must have an understanding of business operations, but doesn’t need to come from a degree

Often ideas come from problems in daily life…Makin Bacon® example

Entrepreneurial Characteristics

Most entrepreneurs possess the following characteristics:

1. Risk Takers 2. Perceptive 3. Curious 4. Imaginative 5. Persistent 6. Goal-Setters 7. Hardworking 8. Self-Confident 9. Flexible 10. Independent

Risk Taker

There is no sure thing in business. A failed business could mean bankruptcy or near bankruptcy. Not everyone can cope with that stress

Successful entrepreneurs minimize and manage risk through proper business planning and assessment of the venture’s prospects for success.

Perceptive

Entrepreneurs do not avoid problems

Problems are perceived as opportunities to learn, improve, grow, create and develop new ideas

Curious

Entrepreneurs like to know: How things work? Could things work?

And answer questions such as: What if? And I wonder…

Entrepreneurs do the research to find out the answers

Imaginative

Entrepreneurs imagine solutions to problems and create new

products or generate new ideas

They have a vision (visionaries)

Persistent

Successful entrepreneurs face constant challengessuch as: 1. mistakes made2. money and family stress3. confronting criticism 4. unforseen events

Successful entrepreneurs do not

give up.

Goal Setter

Successful entrepreneurs are motivated by:

1. setting new goals

2. mapping out the steps to take to

reach their goals.

Hardworking

No success comes easy. There is no easy way to be successful.

The road to excellence is not paved by a single act, but rather

aseries of acts.

Self-Confident

Entrepreneurs believe in themselves – they have a

postive self-worth (self-esteem), and self- image

Believe their efforts will pay off

Flexible

The only constant in life and business is change

Entrepreneurs view change as an opportunity

Must be able to be flexible and adapt to changing trends in the market, technology, economic environment and competitive environments.

Independent

Entrepreneurs have a need

to be in control of their own

destiny.

They don’t like to work in a controlled environment being told what to do.

Entrepreneurial Skills

Skill means having the knowledge and ability to do something specific.

Skills are easier to develop than characteristics.

Entrepreneurs have a variety of skills including:

1. Research2. Leadership and Management Skills3. Relationship Skills

1. Research Skills

One of the most important research skills is knowing what questions to ask.

The first step in acquiring knowledge and information is asking a good question.

Research Skills

Entrepreneurs may begin with questions such as:1. “Why is that?”

2. “What if?” 3. “How does that work?” 4. “How could I make it easier to..”?

etc

Research Process

1. Ask the questions

2. Gather the research

3. Organize the data collected

4. Analyze/Interpret data collected

5. Draw conclusions

6. Map out next steps

Entrepreneurship and the Economy

Entrepreneurship is a key part of the economy

Nearly one in ten of all Americans 18-64 is involved in some form of entrepreneurship

More than 670,000 new businesses are created annually

Businesses with fewer than 500 employees are responsible for over 60% of new jobs created between 1993 and 2003

Financing A majority of money needed to

start a new business comes from the entrepreneur and his/her family and friends

1 in 5 Americans has invested in a business of someone they know well

Venture capital is money provided by large investors to finance new products and new business that have a good chance of being profitable

Venture Capital

Late 1990’s many venture capital co. were formed

Supplied > $100 billion each yr. to new businesses

Most were high-tech e-commerce start-ups Failed…venture capital decreased Other sources include loans from banks,

credit from other businesses

Productivity

New and small businesses produce large volumes of goods and services

Businesses without employees besides the owner account for $600 billion in sales annually

Over ½ of the U.S. GDP comesfrom small businesses each year!

Opportunities and Risk

There are many risks that go along with starting a new business

Must give up a regular job and stable income

Benefits = personal control overyour own business & satisfactionof creating a successful company

New Business Opportunities Innovation is any invention or creation

that is brand new

Improvement is a designedchange the increases theusefulness of a product, service,or product

Either of these types of inventions may become the basis of a new business

New Business Opportunities (cont.)

Inventors may sell idea to another co. for development and sale

Innovations can be anything from Post-its (Arthur Fry) to an artificial heart

New services can be considered improvements or innovations as well

Entrepreneurs are creative problem solvers

Recognizing Risks

Developing a successful new business is not easy

The National Federation of Independent Business reports that of all new businesses, only one third actually makes a profit.

Over 50% of all new businesses are discontinued.

Recognizing Risks (cont.)

The primary reasons that businesses started by entrepreneurs close include:

• Lack of adequate capital• Low sales• Higher than expected expenses• Competitive pressure• An owner unprepared to manage a growing

business• Operations requiring more time than the owner is

willing to commit

Assessment

Pg. 131

4 points

Complete 1-4, 4 points