Business Chapter 8

Chapter 8 section 1 Entrepreneurs- is profit seeker who

develops a new product or process and assumes the risk of profit or loss.

E.g. Bill Gates, Donald Trump, Dr. Dre, Shakira, Jay Z, Jennifer Lopez, Beyonce, P-Diddy or Sean John Combs, Russell Simmons, David Beckham, Paris & Nicole Hilton, &The Walton “Sam’s Club & Wal-mart.”, Mom & Dad.

An Entrepreneur

Comes up with an idea, turns that idea into a marketable product, accepts the risks of success or failure, and claims any resulting profit or loss.

Entrepreneurs and Creative Change. 1. Introduce New Products. 2. Improve Quality of Existing

products. 3. Introduce New Production

Methods. 4. Introduce New Ways of Doing

Business.

Financing the Business

Business need money to begin and run the business.

They must acquire the necessary resources, including hiring employees and buying supplies.

Financial Capital, that is the money needed to start or expand the business.

Financial capital may be obtained through bank loans or from venture capitals.

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Venture Capitalist – individuals or companies that specialize in financing start-up firms.

Profit Attracts Competitors. Entrepreneurs may earn profit in the short run.

It is in the long run that attracts competitors and substitutes.

Other businesses will enter the market and try to duplicate the success of the original entrepreneur.

Competitors try to offer a better product or a lower price.

The remain in the long run.

Who isn’t an Entrepreneur? People may carry out just one of the

functions of an entrepreneur. They may dream up a new product

or process, they may dream up a new product or process.

Invention, Innovation, and Entrepreneurs Innovation is the process of turning

an invention into a marketable product.

Inventors are entrepreneurs if they bear the risk of success or failure.

Most inventors work for firms as paid employees.

Pfizer, Dow chemical, or Intel. Apple Intrapreneurs, are paid even in years

when their creative juices slow down.

Managers and entrepreneurs Most entrepreneurs do more than

simply sell their goods ideas to others.

They try to bring their ideas to the market by paying resource owners for the right to control these resources in the business.

Stockholders and Entrepreneurs In the USA 50,000,000. Corporation fails, stock holders could

lose the amount they paid for that particular stock.

If the corporation thrives, the stock value will increase and stock holders will benefit.