Entrepreneurship Taking Risks and Making Profit Essay

Submitted By shyan13
Words: 540
Pages: 3

Entrepreneurship: Taking Risks and
Making Profit
GEB 1011
Introduction to Business
Greg Lindeblom

Guess which company?
 In

1907, two Seattle teenagers pooled their money and came up with $100
 They started delivering messages and parcels by bicycle for local merchants
 What company did they found?

Guess which company?
 United

Parcel Service (UPS)
 Founded in Seattle in 1907 by Jim Casey and Claude Ryan

Business and Entrepreneurship
 Business

= any organized activity that offers goods and services in a market
 Entrepreneur = a person who risks money and time to start and operate a business

An entrepreneur accepts the risk and therefore deserves reward = profit

 Profit

= the difference between revenues and costs for a business

Other definitions
 Stakeholder

= someone with a vested interest in the success of a business

Shareholder, employee, manager, customer, vendor Profit and Loss
 When

revenues > costs, the business earns a profit
 When revenues < costs, the business earns a loss
 Profit is the motivation for all business activity

Risks and Rewards
 Risk

= the chance that the entrepreneur will lose money, time or personal property
 Entrepreneurs must be compensated for taking the risk = profit
 How do entrepreneurs earn that reward?

Courage, creativity, capacity for hard work
Giving up other aspects of a “comfortable” life

 Why

take the entrepreneurial challenge?

Opportunity, independence, challenge, profit

 What

kind of personal attributes are necessary for an entrepreneur?

Self-direction and self-discipline
Tolerant of uncertainty

Objectives of business
 Survival
 Growth

– increasing sales and market share

 Profit
 Social

responsibility – to produce a good or service that has utility and quality

The environment confronting an entrepreneur  When

an entrepreneur decides to start a business, he/she must consider:

Legal aspects
Global environment

 There

is more to the decision than the product/service and the customer base

Economic and Legal Environments
 Freedom

of ownership and protection of private property
 Contract and law enforcement
 Economic infrastructure (eg. Tradable currency)  Taxes and regulations
 Minimization or elimination of corruption

Technological Environment
 How

to produce more goods/services with the same resource base
 Productivity of workers and capital

Highly dependent on education

 Delivery


Competitive Environment
 How

many competitors do you have?