Be an Entrepreneur PDF

Be an Entrepreneur Part 1: The Entrepreneur Chapters : 1,2,3,4 Part 2: The Business Plan Chapters : 5,6,7,8 Part 3: The Enterprise Chapters : 9,10,1,11,12,13  Chapter 1 Entrepreneurship: Concepts & History © BE AN ENTREPRENEUR 2021 1 Entrepreneurship: Concepts & His...

Be an Entrepreneur Part 1: The Entrepreneur Chapters : 1,2,3,4 Part 2: The Business Plan Chapters : 5,6,7,8 Part 3: The Enterprise Chapters : 9,10,1,11,12,13  Chapter 1 Entrepreneurship: Concepts & History © BE AN ENTREPRENEUR 2021 1 Entrepreneurship: Concepts & History 1. Definition of Entrepreneurship 2. History of Entrepreneurship 3. Examples of Entrepreneurship 4. The Business World Needs Entrepreneurs 5. Advantages & Disadvantages of Entrepreneurship 6. Trends: Entrepreneurial Economy © BE AN ENTREPRENEUR 2021  Chapter 1 overview In this chapter, you will be introduced to entrepreneurship, the art of founding a business. This chapter contains formal definitions of entrepreneurship. It sets the subject in its historical context. As you read through this chapter, note the growing importance of entrepreneurship in today’s global work environment. Notice the various motivations of people in starting their own business. Self-assessment questions will help to determine if entrepreneurship is something you want to do in life.  Learning Objectives Define entrepreneurship Understand how entrepreneurship has evolved through the years Cite some success stories of entrepreneurs List the advantages and disadvantages of entrepreneurship Understand Trends under Entrepreneurial Economy Define social entrepreneurship and explain why it is relevant in today’s world.  1. Definition of Entrepreneurship The word “entrepreneur” comes from the French word entreprendre, which means “to undertake.” Webster’s dictionary: an entrepreneur is “one who organizes and directs a business undertaking, assuming the risk for the sake of profit.” Entrepreneurship: the art and skill of founding a business. Creating a business that has added economic value, is characterized by creativity and takes 4. The Business World Needs Entrepreneurs When entrepreneurs succeed, the results benefit the whole society. a state’s achievement is translated into economic growth, only with the intervention of entrepreneurs. The world re-focuses from BIG to SMALL 5. Advantages & Disadvantages of Entrepreneurship Achieve ambitions 01 02 Feel create respect opportunit ies 06 Advantages of entrepreneurship 03 creative independent 05 04 Distinguished 5. Advantages & Disadvantages of Entrepreneurship Income instability 01 02 High Less pressure social life 06 Disadvantages of entrepreneurship 03 working long High risk 05 04 hours Full responsibility 3 Ownership Structure Of The Business Types of ownership Types of businesses Size of the business © BE AN ENTREPRENEUR 2021  Sole proprietorship Sole proprietorship. This is the simplest form of structure to set up. It is the oldest and most common form of business in the world. A business that falls under this category has no legal existence separate from its owner. So if your business goes into debt, those you borrow from can claim the business’s assets and your own assets as payment.  Sole proprietorship Pros of Sole Proprietorship Structure 1. You control the business. 2. Easy and cheaper to set up. 3. You own all profits. 4. Few administrative duties. 5. You can decide matters quickly. 6. Profits are taxed as personal income.  Sole proprietorship Cons of Sole Proprietorship Structure 1. Hard to obtain financing. 2. If the business can›t pay its debts, those you borrowed from can go after what you own! 3. Big burden on your shoulders. 4. Salary is often low and the benefits minimal. 5. You manage all the different aspects of the business  General partnership General partnership are personally liable for all transactions of the business and run the same risk of unlimited liability as proprietors in the event of business failure.  General partnership Pros of General Partnership Structure l. Raises capital for the business. 2. Relatively easy to set up. 3. Partners can pool their knowledge. 4. Partners share the liability. 5. Few administrative duties  General partnership Cons of General Partnership Structure 1. You are not protected from the bad thnancial decisions of your partner. 2. Limited tax savings— only direct, out-of pocket expenses can be deducted. 3. Disagreements among partners can be unpleasant. 4. Can be difficult to dissolve.  Corporation Corporation: A legal entity that exists apart From the people who created it. The corporation is owned by its shareholders and run by board of directors elected by the shareholders. Shares of a corporation: Equal parts of the ownership of a company.  Limited Liability Company Limited Liability Company: A legal form of business that provides limited liability to its owners. It is not a corporation. But like a corporation, it provides limited liability. An LLC is often more flexible than a corporation. lt is a form of organization well suited to companies with u single owner 2- Types of Businesses Buy an existing business  Start-ups 1- Start-ups: New companies built from scratch. Most startups do not evolve into large and long term firms. More than 60 percent are out of business in the first six years. More than 70 percent are out of business in the first eight years. Evidence suggests that of those that survive, most remain small  Start-ups The Start-up Business Advantages Disadvantages Unique idea or opportunity Many variables for which you will initially have assumptions rather than facts Unlimited potential growth N0 assurance that you can and earnings. acquire enough customers within a certain timeframe  Buy an existing business 2. Buying a Business Advantages of Buying a Business 1. Financial track record can be reviewed to analyze performance. 2. The current owner trains you to take over. 3. Customers are already familiar with the product. Supplier and vendor relationships are already established.  Buy an existing business 4. The business may offer a prime location. 5. Employees are established. 6. Loan approvals are easier to obtain for an established business. 7. The existing owner may be willing to finance part of the new business. 8. Record keeping and accounting systems are already installed.  Buy an existing business Disadvantages of buying business. 1. The cost is generally more than that 0f a start-up. 2. The owners’ real reason for selling may be kept from you. 3. The validity of financial statements may be questioned. 4. Customer satisfaction levels may be below what you are led to believe. 5. Condition of assets may be worse than it appears.  Buy an existing business 6. Existing employees may not be suitable. 7. Equipment and facilities may be obsolete or in need of repair. 8. The inventory may be outdated. 9. Change and innovation may be difficult to bring about. 10. Receivables may be worth less than face value. 11. The business may be overpriced  Franchise A franchise agreement is an agreement under which one party (the franchiser) grants to another (the franchisee) the rights to market or distribute a patented or trademarked product or service in exchange for payment or royalties.  Franchise https://www.franchisedirect.com/top100globalfranchises/rankings  Franchise Statistics There are more than three thousand franchise opportunities in the U.S. alone. Franchises cover every type of business imaginable. Franchises control 50 percent of retail sales in the U.S. A new franchise opens somewhere in the world every six minutes.  Franchise Advantages of Franchising 1. Provides a proven formula for success. 2. Provides training programs for new owners.. 3. Advertising and promotional programs are initiated by the franchise. 4. Brand and trade names are already established. 5. Accounting systems are pre-tested and established. 6. Franchises offer volume discounts on purchases.  Franchise Disadvantages of Franchising 1. High start-up costs. 2. You have to pay franchise fees and annual fees. 3. Franchisees must abide by the operating restrictions of the franchise. 4. Some franchises require a renewal fee after a period of time. 5. Growth of franchise may be limited by contract.  3- Size of the Business Size of Business Micro- busines Small Medium large s  3- Size of the Business Saudi Arabia Type Employees Sales Micro-Business 1-5 Less than SR 3M Small 6-49 3-40 SR M Medium 50-249 40-200 SR M Munshaat 2017 4 DETERMINE THE BUSINESS OPPORTUNITY What the customer wants What the Entrepreneur Wants to Do © BE AN ENTREPRENEUR 2021  1- What the Customer Wants One of the ways of finding a business opportunity is to look for things that customers want to buy. When you do this, you are trying to come up with a product or service that fulfills a human need.  1- What the Customer Wants Products need to fulfill human needs, and remember that human needs may be those that are not being met at all, those that are poorly met, not yet being met in your particular location, and needs that are not recognized by the customers themselves.  1- What the Customer Wants To find these needs that could lead to business opportunities, you should look go to trade fairs, exporters conventions, inventor gatherings, read business newspapers, research among patent lawyers and the patent office, and technology magazines. You may also want to find the information through the Internet, and some useful websites include The Entrepreneur’s business ideas index, among others.  1- What the Customer Wants To analyze whether you should pursue the ideas that you find, trim your list of 100 into a shorter list of 10. To trim the list, find out whether these ideas, products or services are currently in demand, need too much capital, determine whether it is an existing product, a variation of an old product, a product that can be made to appeal to a new market or a totally new product.  1- What the Customer Wants Research the market to find out: who will be interested in your product or service. determine how you can market it exclusively, how much it will cost to market the product, how much it will cost to produce, whether you can offer it quickly and whether you can get funding.  1- What the Customer Wants It is important to find your product’s unique selling proposition—that benefit that sets it apart from all the rest. You need to find out whether you are offering something that is faster, higher, or stronger than others.  Protect the business idea. Your ideas are your intelulectual property. You deserve to get commercial benefit from them. There is a need to protect your idea from other business- men who want to copy it and make money from it. If they want to use your idea, they need to pay you some money. There are four types of common intellectual properties Protect the business idea. Copyright Patent 01 02 Intellectual Properties Trade secret 04 03 Trademark  Intellectual properties Copyright: gives protection for the creative work of composers, authors/writers, artists, and filmmakers. A copyright endures during the lifetime of the creator and for many years after his or her death. Copyright is designated by the symbol ©  Intellectual properties Patent: the exclusive right to use or sell an invention. There are several kinds:. patents on a device · patents on an artistic design · patents on a mechanical design. patents on a plant (created by a botanist),  Intellectual properties Trademark: a word or symbol used by a manufacturer or merchant to identify their goods and distinguish them from others. A trademark is designated by the symbol ®  Intellectual properties Trade secret: A secret formula, method, device, or item of information that gives an entrepreneur an advantage over competitors  Review Questions Who had the What are the most impact on different Who first coined how the world definitions of the term now defines entrepreneurship “entrepreneur”? entrepreneurship ? ? What does the What does the Austrian school Schumpeterian of thought say theory say about about entrepreneurship entrepreneurship ? ?  Review Questions Why was the 20th What are the latest Cite examples of century called “The trends on successful Century of The entrepreneurship? entrepreneurs. Entrepreneur”? What impact does entrepreneurship What are the pros What is social have on a country’s and cons of entrepreneurship? economy as a entrepreneurship? whole? Give examples of social entrepreneurs and what they do.