Intro-to-Entrepreneurship-1.pptx

 INTRODUCTION TO ENTREPRENEURSHIP Business  Is defined as an organized effort of individuals to produce and sell goods and services in order to satisfy the needs of society  It is a commercial activity engaged in as a means of livelihood, a line of work or a particular trade or prof...

 INTRODUCTION TO ENTREPRENEURSHIP Business  Is defined as an organized effort of individuals to produce and sell goods and services in order to satisfy the needs of society  It is a commercial activity engaged in as a means of livelihood, a line of work or a particular trade or profession Entrepreneurship Refers to the economic activity of a person who starts, manages, and assumes the risk of a business  Why is Entrepreneurship Important? Creation of new product, services and processes  Innovation  A business must sustain itself.  A business must also innovate to fulfill the demands of the community and the people, to make lives more comfortable It is shown by coming up with new way to produce a product.  One of the key to longevity of the business. Creation of employment Creation of wealth  Economic & Social Growth Contribution in nation growth Entrepreneur Comes from the French word “entreprende” which means to undertake It was coined by Jean Baptiste Say (a renowned French Economist) The person behind entrepreneurship means “between – taker” (risk taker) or “go – between” (someone who takes messages between people who are unable or unwilling to meet or simply a mediator). TYPES OF ENTREPRENEUR HABITUAL GROWTH ENTREPRENEUR ENTREPRENEUR - Owners for a lifetime - Goal is major - Goal is personal success satisfaction, income comes second - If they top 1 business, they start another TYPES OF ENTREPRENEUR HARVEST SPIRAL/HELICAL ENTREPRENEUR ENTREPRENEUR - Owners with exit - Balance family & plan business (usually successful at each - Goal –work first, aspect) play – later - Slows down when children are young & push when children are older TYPES OF ENTREPRENEUR Occasional - Have another job – primary - Fascinated by entrepreneurship - Classic part – time entrepreneur Entrepreneurs’ Task & Responsibilities Products and services for customers & producers Employment Taxes Demand for suppliers products & services Training facilities for future entrepreneurs  History & Development of Entrepreneurship  History Of Entrepreneurship Earliest Period Middle Ages 17 Century th 18th Century 19 & 20 Century th th  Earliest Period Marco polo , as a go-between was an Italian. Go between - a person who acts as agent or intermediary for two people or groups in a transaction or dealing. He wants to trade routes to the far East.  Earliest period As a go-between, He had to sign a contract with a person to sell his goods. In the contract, merchant-adventurer took a loan at 25% rate including insurance. When the merchant-adventurer successfully sold the goods and completed the trip, the profits were divided with the capitalist taking most of them (up to 75%), while the merchant-adventurer settled for the remaining 25 %.  Capitalist - was the passive risk bearer and merchant-adventurer took the active role in trading, bearing all physical and emotional risks.  Middle Ages A typical entrepreneur in the middle age was the CLERIC. The person in charge of great architectural works used to build castles and fortifications, public buildings, abbeys, and cathedrals.  Middle Ages Entrepreneur - used to describe both as an actor and a person who managed large production projects. This individual did not take any risks, but merely managed the project using the resources provided, usually by the government 17 Century th  Reemergent connection of risk with entrepreneurship.  Entrepreneur being a person who entered into contractual agreement with government to perform a service or supply stipulated products. 17th Century  Since the contract price was fixed, any resulting profit or losses were entrepreneur’s because during this period entrepreneurs are those persons who buy products at certain price and sell at an uncertain price, therefore operating at a risk.  John Law, a Frenchman was one of the entrepreneur in that period. The founder of the royal bank of France and the Mississippi Company, which had an exclusive franchise to trade between France and the new world. The company collapsed when he attempted to push the company’s stock price higher than the value of its assets. Monopoly on French trade eventually led to collapse of the company. 18th Century In the 18th century, the person with capital was differentiated from the one who needed capital. Many inventions developed during this time and changed the world 18th Century Inventors like Eli Whitney and Thomas Edison developed new technologies and were unable to finance their inventions themselves. So, they looked for a capitalist to finance their inventions.  Eli Whitney was an American inventor best known for inventing the cotton gin. This was one of the key inventions of the industrial Revolution. Thomas Edison, the inventor of many inventions. He was developing new technologies and was unable to finance his inventions himself. Edison was a capital user (an entrepreneur), not a provider (a 19th & 20th Centuries  An entrepreneu r organizes and operates for personal gain. 19th & 20th Centuries He pays current prices for the materials consumed in the business. LAND PERSONAL SERVICES CAPITAL HE REQUIRES He contributes his own initiative, skill and ingenuity in the planning, organizing, and administering the enterprise. He retains the profit 19th & 20th Centuries The function of the entrepreneurs is to recreate or revolutionize the pattern of production by introducing an invention. Innovation, the act of introducing some new ideas, is one of the most difficult tasks for the entrepreneur. 19th & 20th Centuries Andrew Carnegie is one of the best examples of this definition. Andrew Carnegie, descended from poor Scottish family made the American steel industry.  20TH CENTURY The notion of an entrepreneur as an innovator was established The concept of innovation and newness is an integral part of entrepreneurship. The newness can consist of anything from a new product to a new distributions system to a method for developing a new organizational structures  ENTREPRENEURSHIP TODAY  Is the process of creating something new with value by devoting the necessary time & effort, assuming the accompanying financial, physical and social risks & receiving the resulting rewards of monetary & personal satisfaction & independence.