Page 125 - Business Principles and Management

Unit 2

5.1 Entrepreneurship

Goals Terms
• Describe the characteristics of • business plan • Small Business
successful entrepreneurs. • Small Business Development
• Discuss the responsibilities of Administration (SBA) Centers (SBDCs)
owning your own business.

Characteristics of Entrepreneurs

You learned earlier that an entrepreneur is a person who assumes the risk of start-
ing, owning, and operating a business for the purpose of making a profit. Although
individuals form businesses to earn a profit by providing consumers with a desired
product or service, they often must invest months or even years of hard work before
they earn a profit. About half of all new businesses end within the first five to six
years. Businesses often fail for financial reasons, but many closings of young firms
occur because the owners are not well suited to entrepreneurship. But although
successful entrepreneurs are all uniquely different, they also have some common
personal characteristics.
Some people would rather work for others, whereas other people prefer to
work for themselves. Entrepreneurs who prefer self-employment enjoy the free-
dom and independence that come with being their own bosses and making their
own decisions. Even when their businesses are not immediately successful, they
do not give up. In fact, some entrepreneurs who are eventually successful often
experience unsuccessful business start-ups. However, they learn from their mis-
takes and start over.
Entrepreneurs are self-starters who have plenty of energy and enjoy working on
their own. They like to take charge of situations and usually work hard and for
long periods in order to meet their goals. Entrepreneurs are also creative thinkers,
often coming up with new ideas and new ways to solve problems. Most successful
small-business owners like people, and people like them. As a result, they are often
community leaders.
Prosperous entrepreneurs have other common characteristics. Generally, they
& starts a computer store, for example, has usually taken some computer courses
facts obtain work experience in the types of businesses they launch. The person who

and worked for a business that makes, sells, or services computers. In addition to
figures having appropriate work experience, successful business owners are well informed
about financial, marketing, and legal matters.
There is no magic age for starting a business. Teenagers, parents of teenagers,
The U.S. economy is dominated and retirees have all started successful firms. In recent years, increasing numbers
by family businesses. According of women, Asian-Americans, Hispanics, and African-Americans of all ages have
to some estimates, as many as opened their own firms. To start your own business, you need adequate funds,
90 percent of all businesses, in- a general knowledge about business, some work experience, and a business
cluding the majority of small- opportunity.
and medium-size companies, One of the very first decisions a budding business owner must make is what
are owned by families. legal form of ownership to adopt. The form of ownership selected depends on

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