Entrepreneurship

Entrepreneurship OWNING YOUR FUTURE Twelfth Edition by The Network for Teaching Entrepreneurship

CHAPTER IMPORTANCE OF 1 ENTREPRENEURSHIP

GUIDING QUESTION: “What is the role of entrepreneurs?”APPLICATION TO BUSINESS PLANNING: Problem IdentificationOBJECTIVES LESSON VOCABULARYt
Compare and contrast the functions of an entrepreneur and t
business an employee. t
dot-com company t
employeet
Analyze the pros and cons of being an entrepreneur. t
entrepreneurt
Describe how entrepreneurs solve problems through products t
entrepreneurial t
entrepreneurship or services. t
product t
rewardNFTE Entrepreneurial Mindset Characteristic Focus t
risk t
serial entrepreneur Opportunity Recognition t
serviceNational Entrepreneurship Standardst
A.09 Describe entrepreneurial planning considerationst
A.12 Assess risks associated with venturet
C.01 Explain the role of business in societyt
C.02 Describe types of business activitiest
F.01 Distinguish between economic goods and servicest
F.12 Explain the concept of organized labor and businesst
F.24 Determine factors affecting business riskCommon Career Technical Core Standardst
BM.3 Explore, develop and apply strategies for ensuring a successful business career.t
BM-HR.1 Describe and follow laws and regulations affecting human resource operations.t
CRP.1 Act as a responsible and contributing citizen and employee.t
CRP.3 Attend to personal health and financial well-being.National Entrepreneurship Standards:Career Competencies H.02 Analyze employer expectations in the business environment Importance of Entrepreneurship 3

ENTREPRENEURIAL INVESTIGATION Weathering the Storm Gary Rayner founded his business, LifeProof, as a smartphone case com- pany in 2009. Gary came up with his idea because he loved his iPhone, but also loved outdoor activities like biking, running, and surfing. Not to mention, he had small children who would destroy his phone by throwing it in the garbage and bathtubs. He wanted to find a way to protect his phone so that he would not worry about it anymore. Other items on the market were bulky. Or, they made aspects of the phone, like the camera, unusable. He decided he wanted to design a sleek, thin, and functional case that was waterproof, dustproof, and childproof! Today, LifeProof is valued at over $350 million and makes cases for smartphones and tablets. The company mantra is “Freedom—freedom to be connected anywhere with your mobile device; freedom to build relation- ships, gain knowledge, exercise, and juggle work; freedom for all people anywhere to go everywhere.” Do some research on LifeProof and Gary Rayner’s story specifically: t
What products do they make today? t
What problems do their products solve for customers? After you research, respond to the following questions: t
Do you think LifeProof solves a real problem? t
Do you think the LifeProof concept was a good idea? Why or why not? Be prepared to share your responses with your teacher or class. 1.1 Entrepre-What? Have you ever thought about starting your own business? A business is an organization that provides products or services, usually in order to make money. An entrepreneur (on-tra-prah-NEWR) is someone who creates and runs a business. If you have a business idea, you could become an entrepreneur and create a business. However, entrepreneurship isn’t for everybody. Many chose to be an employee, a person who works for a business owned by someone else. Even if you have never thought about starting your own business, learning about how to think and act like an entrepreneur, or thinking and acting entrepreneurial, can be helpful for the future. This unit will show you how thinking and acting like an entrepreneur can help you develop a plan for your own future.4 Chapter 1

How Employees and Entrepreneurs DifferWhen an entrepreneur starts a new business, it involves risk. Risk isthe chance of losing something. An entrepreneur makes an investmentof money, time, and energy in the hope of getting greater rewards, orbenefits. The saying, “No risk, no reward,” relates to this concept. Because employees work for someone else, but entrepreneurs workfor themselves, entrepreneurs risk more than employees. Employees mayrisk losing a job if they do not perform the job well, but they are paidfor their work. Entrepreneurs risk not being able to pay themselves ifbusiness is “slow.” A failed business might also mean losing the moneythe entrepreneur invested into it. The rewards that employees and entrepreneurs get from their workcan also be different. A reward can involve money, but it can also besomething such as personal satisfaction or independence. As a businessowner, an entrepreneur is in control of the money made by his or herbusiness. He or she also has the “final say” in all business decisions.As a result, entrepreneurs are ultimately responsible for the success orfailure of their businesses. Consider this example to understand the risks and rewards for anentrepreneur vs. her employee. Carla Hernandez decides to start a fruit“smoothie” drink shop in her neighborhood. Carla invests a lot of money,time, and effort to get the business started. Tony Bertelli, one of heremployees, creates a new juice combination that Carla decides to put onthe menu. By doing so, she risks the money spent on ingredients. Shealso risks a drop in sales if customers don’t like the drink. As it turnsout, the new drink is a great hit with customers, and sales dramaticallyincrease. Tony receives a small raise as a reward. Carla will benefit themost because she owns the business and took the bigger overall risk.Risks involve making choices, and entrepreneurs need to weigh theirchoices carefully to achieve their goals for their businesses. Figure 1-1 Small Business Owners. When you own a business, you are your own boss. Applying Concepts. Do you know someone who owns a “small business” in your town? Is there a “big business” that is in competition with them? Importance of Entrepreneurship 5