Laboratory Management - 07 Entrepreneurship

LABORATORY MANAGEMENT • ENTREPRENEURSHIP OUTLINE • Entrepreneurship o Introduction o History of Entrepreneurship o Characteristics of Entrepreneurship o Why be an Entrepreneur? o Characteristics of Successful Entrepreneurs o Entrepreneurship and Economy o Types of Economic Systems o Supply and Demand o Competition in Market Economy o Profit Motive o Nonprofit Organizations • CHARACTERISTICS OF ENTREPRENEURSHIP • • • ENTREPRENEURSHIP • Entrepreneurship is the ability and readiness to develop, organize and run a business enterprise, along with any of its uncertainties in order to make a profit. The most prominent example of entrepreneurship is the starting of new business. INTRODUCTION • • Bird sees entrepreneurs as mercurial, that is, prone to insights, brainstorms, deceptions, ingeniousness and resourcefulness. they are cunning, opportunistic, creative, and unsentimental. Cooper, Woo, & Dunkelberg argue that entrepreneurs exhibit extreme optimism in their decision-making processes. • • • • Entrepreneurship is the willingness and ability of an individual to seek out investment opportunities, establish and run an enterprise successfully. o Building something from nothing Stevenson (1985) defines entrepreneurship as the process of creating value by putting together a unique package of resources (product) to exploit an opportunity (sell product). The entrepreneur has an enthusiastic vision, the driving force of an enterprise. The entrepreneur's vision is usually supported by an interlocked collection of specific ideas not available to the marketplace. The overall blueprint to realize the vision is clear, however details may be incomplete, flexible, and evolving. The entrepreneur promotes the vision with enthusiastic passion. With persistence and determination, the entrepreneur develops strategies to change the vision into reality. The entrepreneur takes the initial responsibility to cause a vision to become a success. Entrepreneurs take prudent risks. They assess costs, market/customer needs and persuade others to join and help. An entrepreneur is usually a positive thinker and a decision maker. WHY BE AN ENTREPRENEUR? HISTORY OF ENTREPRENEURSHIP • • • 1800s o Thomas Edison already showed signs of being an entrepreneur and one of the most prolific inventors in history and holding over 1000 patents o Phineas Taylor Barnum/ P.T. Barnum was 60 years old when his circus staged its first show. 1900s o In 1903, William Harley and Arthur Davidson wanted to improve on the two-wheeled bicycle, and the motorcycle was born. o Maggie Lena Walker became the first woman to charter a bank in the United States. Present o Ingvar Kamprad founded IKEA, a furniture business o Stephen Wozniak and Steve Jobs started a company with the goal of bringing personal computers to everyone THE ENTREPRENEUR • • David McClelland described the entrepreneur as primarily motivated by an overwhelming need for achievement and strong urge to build. Collins and Moore studied 150 entrepreneurs and concluded that they are tough, pragmatic people driven by needs of independence and achievement. They seldom are willing to submit to authority. • • Rewards of Being an Entrepreneur o Making Your Own Rules o Doing Work You Enjoy o Creating Greater Wealth o Helping Your Community Risks of Being an Entrepreneur o Potential Business Failure o Unexpected Obstacles o Financial Insecurity o Long Hours and Hard Work CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS • • Self-assessment—evaluating your strengths and weaknesses Self-assessment helps you maximize your strong points and strengthen your weaker ones. APTITUDES AND ATTITUDES • • An aptitude is a natural ability to do a particular type of work or activity well. Aptitudes can sometimes be developed through hard work. An attitude is a way of viewing or thinking about something that affects how you feel about it. 1 PERSONAL CHARACTERISTICS • • • • • • • • • • • Courage: A willingness to take risks in spite of possible losses. Creativity: Inventing new ways of doing things; thinking outside the box. Curiosity: The desire to learn and ask questions. Determination: Refusing to quit in spite of obstacles. Discipline: The ability to stay focused and follow a schedule to meet deadlines. Empathy: Being sensitive to the thoughts and feelings of others. Enthusiasm: Being passionate about something; the ability to see problems as opportunities. Flexibility: The ability to adapt to new situations; a willingness to change. Honesty: A commitment to being truthful and sincere with others. Patience: Recognizing that most goals are not reached overnight. Responsibility: Being accountable for your decisions and actions; not passing the buck. TYPES OF ECONOMIC SYSTEMS • • • COMMAND ECONOMY • • • An ability that’s learned through training and practice. o Business Skill: Understanding how to create and manage abusiness. o Communication Skill: The ability to listen well, write well, and speak well. o Computer Skill: The ability to use technological tools effectively. o Decision-Making and Problem-Solving Skills: Knowing how to apply logic, information, and past experiences to new decisions and problems. o Mathematical Skill: Using math to create budgets, keep accurate records, and analyze financial statements. o Organizational Skill: The knack of keeping tasks and information in order; the ability to plan well and manage your time. o People Skills: The ability to persuade and motivate people; knowing both how to be a leader and work in a team. The government owns or manages the nation’s resources and businesses Command economies are associated with political systems in which the government has strict control over social and economic affairs. Socialism and communism are two political systems that are strongly associated with command economies. MARKET ECONOMY/ FREE ENTERPRISE SYSTEM • • SKILLS • Command economy- the government controls the production, allocation, and prices of goods and services. Market economy- suppliers and consumers control the production, allocation, and prices of goods and services. Mixed economy- economic system that blends elements of the command economy and the market economy • • Suppliers produce whatever goods and services they wish and set prices based on what consumers are willing to pay Characterized by individual freedom of choice and voluntary exchange. Also referred to as capitalism Individuals and businesses are free to own and trade goods and invest cash in businesses SUPPLY AND DEMAND • • Supply is the quantity of goods and services a business is willing to sell at a specific price and a specific time. Demand is the quantity of goods and services consumers are willing to buy at a specific price and a specific time. SUPPLY AND DEMAND CURVES • A supply curve on a graph shows the quantity of a product or service a supplier is willing to sell across a range of prices over a specified period of time. o Quantity is shown on the x-axis, and price is shown on the y-axis. o The supplier is willing to provide more as the price increases and less as it decreases. • A demand curve on a graph shows the quantity of a product or service consumers are willing to buy across a range of prices over a specified period of time. o The quantity is shown on the x-axis, and the price on the y-axis. o Consumers are willing to buy more of a product at a lower price than at a higher one. ENTREPRENEURSHIP AND ECONOMY ECONOMIC SYSTEM OR ECONOMY • • • A method used by a society to allocate goods and services among its people and to cope with scarcity. Political, moral, and cultural factors affect what kinds of economic systems develop and thrive in different societies. Fundamental Questions of Economics o What goods and services are produced? o What quantity of goods and services are produced? o How are goods and services produced? o For whom are goods and services produced? 2 o Prosperity and financial independence are goals for many people. Entrepreneurs must work hard and make wise business decisions to earn a profit, but the personal financial benefits can be very rewarding. NONPROFIT ORGANIZATIONS • • • • • A supply and demand curve is a graph that includes both a supply curve and a demand curve. It shows the relationship between price and the quantity of a product or service that is supplied and demanded. The equilibrium point is where the supply curve and the demand curve intersect. This is the point at which supply and demand are balanced. The x-axis coordinate of the equilibrium point identifies the equilibrium quantity. This is the quantity at which the supply equals the demand. The y-axis coordinate of the equilibrium point identifies the equilibrium price. This is the price at which supply equals demand. It is the price buyers are willing to pay and the supplier is willing to accept. • • • A nonprofit organization (often called a nonprofit or notfor-profit) operates solely to serve the good of society. Nonprofits are not governmental organizations. They operate much like for-profit businesses. Money comes into the nonprofit from donations, government grants, or the sale of goods and services to consumers. • • COMPETITION IN A MARKET ECONOMY • • • • Competition is common in a market economy. Competition between suppliers pushes prices downward. Competition between buyers pushes prices upward. Competition Between Suppliers o If a supplier lowers the price of a product or service, consumers typically buy from that supplier rather than from others. This assumes that only the price changes and all other aspects are equal. Competition Between Consumers o In a market economy, there is not only competition between suppliers but also competition between consumers. When consumers compete against each other to buy a product, they push prices upward. PROFIT MOTIVE • • The profit motive is an incentive that encourages entrepreneurs to take business risks in the hope of making a profit. Benefits of Profit o Entrepreneurs who consistently make a profit over time can build their own wealth and ensure financial independence. This means they do not have to depend on others—family, friends, employers, or the government-for money. 3