BEFORE YOU BEGIN…

Here are some thoughts for you to consider.

Thoughts are the foundation for everything you create—your education, your business, and, ultimately, your life.

 The secret of success in life is for a man to be ready for his opportunity when it comes.
– Benjamin Disraeli
 If I had eight hours to chop down a tree, I’d spend six sharpening my ax.
– Abraham Lincoln
 When there’s nothing to lose and much to gain by trying, try.
– W. Clement Stone
 What really matters is what you do with what you have.
 – Shirley Lord
 You must do the thing you think you cannot do.
– Eleanor Roosevelt
 You are equal to anyone, but if you think you’re not, you’re not.
– Jake Simmons
 Everyone lives by selling something.
– Robert Louis Stevenson
 All businesses were launched by entrepreneurs, and all were once small.
– Nat Shulman
 Many small thing has been made large by the right kind of advertising.
– Mark Twain
 You don’t get what you deserve, you get what you negotiate.
– Chester L. Karrass
 Your most unhappy customers are your greatest source of learning.
– Bill Gates
 In the midst of difficulty lies opportunity.
– Albert Einstein
Learning Objectives:
 Identify the meaning of Entrepreneur
 To know the difference between employees and entrepreneurs
Topics:
• What Is an Entrepreneur?
 How Employees and Entrepreneurs differ?
 Big Business versus Small Business
 What Is an Entrepreneur?
Most of us earn a living by working in a business. A business is an
organization that provides products or services, usually to make money.

A person who works in a business owned by someone else is an

employee of that business. On the other hand, someone who creates
and runs a business is called an entrepreneur
(on-tra-prihNER).
To be entrepreneurial (on-tra-prih-NER-ee-uhl) means to think or act
like an entrepreneur
How Employees and Entrepreneurs differ?
when an entrepreneur starts a new business, risk is involved.
Risk is the chance of losing something.

An entrepreneur makes an investment of money, time, and energy in

the hope of receiving greater rewards, or benefits.
The saying “Nothing ventured, nothing gained” relates to this concept.
Because employees work for someone else and entrepreneurs work for
themselves, entrepreneurs risk more than employees.
Employees may risk losing a job if they do not perform their work well,
but they are paid for their work. Entrepreneurs risk not being able to
pay their employees or themselves if business is “slow.
The rewards employees and entrepreneurs get from their work
can also be different.

 A reward can involve money, but it also might be personal satisfaction or

independence. As business owners, entrepreneurs are in control of the money made
by the business. They also have the final say in all business decisions.
As a result, entrepreneurs are ultimately responsible for the success or failure of their
businesses.
For example, Carla Hernandez started a fruit smoothie shop. She invested money,
time, and effort to start the business. One of her employees created a new smoothie
that Carla put on the menu. By doing so, Carla risked the money spent on ingredients
and she risked a drop in sales if customers didn’t like the new item. But it was a hit.
Sales increased. Her employee received a small raise as a reward, but Carla was the
one who benefited the most because she owned the business
How Employees and Entrepreneurs differ?
 Big Business versus Small Business
 When people think of business, they tend to focus on large companies such as
Ford, Microsoft, and Nike.
 In reality, more businesses are considered small than big. Small firms employ
about half of the U.S. private work force, and they create around 64 percent of all
new jobs. The Small Business Administration (SBA), an agency of the U.S.
government that provides aid and advice to small businesses, defines a small
business as having fewer than 100 employees (fewer than 500 employees in the
case of manufacturing companies). According to the SBA, over 600,000 new
businesses are started in the United States every year—and about 500,000 close.
Even though most businesses begin small, they obviously don’t all stay that way.
An entrepreneur’s goals affect how large a business becomes. For example,
suppose someone starts a neighborhood restaurant. The entrepreneur may not
want to expand the business to include more than one restaurant if personal and
financial needs are being met. Not everyone is interested in increasing the size of
the business.
 Cont. of the topic: Big Business versus Small Business

 In other cases, a business may become so successful that it grows beyond the
wildest expectations of its owners. That is exactly what happened to Whole
Foods Market, Inc. It started in 1980 as one small store in Austin, Texas. Four
businesspeople decided the natural food industry was ready for a supermarket
format. And they were right! Beginning with a staff of 19, Whole Foods Market
was an immediate success. Now Whole Foods Market is the world’s leader in
natural and organic foods, with more than 270 stores in North America and the
United Kingdom and over 54,000 employees worldwide.
One way you can gain a sense of what business is like is by investigating an
internship. These work programs provide practical, on-the-job training in a
business setting.
Another word for an internship is an apprenticeship. In some apprenticeships, a
technical or trade skill is taught, such as carpentry or plumbing. Internships and
apprenticeships are usually short-term programs that can last from a few weeks
to a year. During this time, an apprentice may or may not be paid. Even so, the
experience gained is helpful for either an employee or an entrepreneur
 Presentation of 2 videos
*Entrepreneurs
*Entrepreneurs mindset
 Who is an Entrepreneur?
 An entrepreneur is a person who cultivates an idea into a practical business by
taking responsibility of the risks involved. He gathers people and coordinate them in
order to make his dream a reality.
 As stated previously, you must understand that entrepreneurship is not all about
making money, but devising and implementing a good idea. Therefore, the ability to
execute such idea with a positive mindset, can produce a successful outcome.
 An entrepreneur should not only plan to start a business, but he must strategically
ensure the progress of the business. One of the reasons why some businesses fail
is because the owners just start without strategizing their growth.
 For instance, you have to ensure that your business keeps thriving even when you
are not there to monitor it. Therefore, entrepreneurship is beyond owning a
business, rather, it is about safeguarding the consistent progress of the business.
Definition of mindset
 A mindset refers to the philosophy that guides your behavior or attitude towards
situations, affairs and people. In essence, mindset has to do with your thought, and
such thought can either affect you positively or negatively. Thus, the following briefly
explains positive mindset and negative mindset:
 Positive Mindset
 Positive mindset occurs when you are optimistic about a situation or affair. That
is, you are expectant and enthusiastic about something, by believing that it will
produce a good result. For instance, you may find yourself in a less developed
business environment, but your positive mindset can affect the environment
positively, if you put it into action.
 People with positive mindsets are goal getters. Therefore, you must understand
that challenges and distractions also constitute life, but, being focused will help
you achieve your goal.
 Negative Mindset
 Negative mindset occurs when you are pessimistic about a situation, affair or life
in general. In other words, you feel doubtful and unenthusiastic about your
activities, environment, among others.
 To defeat negative mindset, you must be careful of allowing your past failures to
control your present and future events. Also, ensure you dissociate yourself from
people who affect you negatively.
 In a nutshell, mindset has to with your mentality and belief.
 Being an entrepreneur doesn’t require owning a
business. Being an entrepreneur is all about mindset.
 You don’t have to be a startup CEO or even own your
own business to be an entrepreneur, but the
entrepreneurial mindset is one that attracts success.
Before we get to far, it’s important to note that there is
absolutely nothing wrong with being an employee.
 Entrepreneurship involves dreaming, designing,
launching and managing a new business. Entrepreneurs
have the vision and leadership skills to transform a
business idea into something tangible.
 “You don’t have to start a company to be an entrepreneur. You just have to be someone
that makes things happen. If you feel like you can’t do it – or it’s an experiment – and
cap the downsides, then you’re taking the measured, intelligent approach,”
– Tim Ferriss.
With this quote, Ferriss is touching upon something powerful, that any growth-oriented person can tap into and
benefit from;
 Not everyone has the ability or the will to become an entrepreneur. It all begins with the
right mindset, because without it, you won’t be successful in business.

 In every organization there will be categories of workers :

 Workers with an Employee Mindset

 Workers with an Entrepreneurial Mindset

 In this article I’ll compare the mindset of an Employee (someone who works for a
company in exchange of a salary) and the mindset of an Entrepreneur. Obviously the
descriptions are broad generalizations and don’t apply to every individual. Some people
will have characteristics from both columns.

 There’s no need to get offended by what you read below — the purpose is to describe
the type of mindset you need to become a successful entrepreneur.
Let’s see some vital differences between Employees & Entrepreneurs.

 Employees dream about freedom. Entrepreneurs enjoy freedom.

 Employees think without starting. Entrepreneurs start without thinking.
 Employees break down after failure. Entrepreneurs wake up after failure.
 Employees improve their weaknesses. Entrepreneurs improve their skills.
 Employees trade time for Money. Entrepreneurs create Value for Money
 Employees wait for the right time. Entrepreneurs mate without thinking about the right time.
 Employees aim for the promotion in their company. Entrepreneurs aim for the promotion in their
business.
 Employees see Security is taking no risks. Entrepreneur sees Security is taking calculated risks.
 Employees dream their plans. Entrepreneur plan their dreams.
 Employees expect their boss for fix the problems. Entrepreneurs solves the business problems
themselves
 Employees focus on Money & position. Entrepreneurs focus on Time, money and significance
 Employees wish to be the smartest person in the room. Entrepreneurs wish to be surrounded with
people who are smarter than me.
 Employees favourite phrase Payday. Entrepreneurs Business Opportunity
 Employees look holidays as a relief. Entrepreneurs look holidays for strengthening their beliefs.
So, are you an Employee or an Entrepreneur?

 Both paths can yield satisfying results and benefits if you are operating in your comfort
zone. Spend some time taking self-inventory and honestly assessing not just what career
field you should pursue, but how to pursue it: as an employee under a pre-defined, existing
structure or as an entrepreneur where you set the stage to do things your way.

 “Your work is going to fill a large part of your life, and the only way to be fully
satisfied is to do what you believe is great work and the only way to do great work is
to love what you do.” — Steve Jobs
Assignment # 2;
Reference: (Entrepreneurship-Owning your future) Chapter-1 Introduction to Entrepreneurship ...4 to 11
 Read the Entrepreneurship Issues Pages 7 to 9
(Serial Entrepreneurship)
 Each group will write their perception about the topic.
For Group Activities: Read and Study
Group; 2,3 ,4
1. Rewards of Being an Entrepreneur
2. Entrepreneurship in History (Page 10)
Group ; 5,6 and 7
1. Risks of Being an Entrepreneur
2. The Present( Page 11)
 1.1 What Is
SECTION

Entrepreneurship?
OBJECTIVES VOCABULARY
⦁ Define what it means to be an entrepreneur ⦁ apprenticeship
⦁ Compare the pros and cons of being an entrepreneur ⦁ business
⦁ Identify successful entrepreneurs and their achievements ⦁ employee
⦁ entrepreneur
⦁ entrepreneurial
⦁ entrepreneurship
⦁ green company
⦁ internship

Think about the following question:

Have you ever considered starting your own business?

Write your answer (yes or no) on a piece of paper. Be prepared to discuss your
answer in class. If you answered “yes,” think about what kind of business
you’d like to create.

What Is an Entrepreneur?
Most of us earn a living by working in a business. A business is
an organization that provides products or services, usually to make
money. A person who works in a business owned by someone else
is an employee of that business. On the other hand, someone who
creates and runs a business is called an entrepreneur (on-tra-prih-
NER). To be entrepreneurial (on-tra-prih-NER-ee-uhl) means to
think or act like an entrepreneur.

How Employees and Entrepreneurs Differ

When an entrepreneur starts a new business, risk is involved. Risk is
the chance of losing something. An entrepreneur makes an invest-
ment of money, time, and energy in the hope of receiving greater
rewards, or benefits. The saying “Nothing ventured, nothing
gained” relates to this concept.
Because employees work for someone else and entrepreneurs
work for themselves, entrepreneurs risk more than employees.
Employees may risk losing a job if they do not perform their work
well, but they are paid for their work. Entrepreneurs risk not being
able to pay their employees or themselves if business is “slow.”

Introduction to Entrepreneurship 5

▼ Figure 1-1
Internship
Working as an intern or apprentice
provides practical experience for
students.
Predicting. What kinds of useful
business knowledge might you learn
through an internship?
6 Chapter 1
The rewards employees and entrepreneurs get from their work can
also be different. A reward can involve money, but it also might be per-
sonal satisfaction or independence. As business owners, entrepreneurs
are in control of the money made by the business. They also have the
final say in all business decisions. As a result, entrepreneurs are ultimately
responsible for the success or failure of their businesses.
For example, Carla Hernandez started a fruit smoothie shop. She
invested money, time, and effort to start the business. One of her employ-
ees created a new smoothie that Carla put on the menu. By doing so,
Carla risked the money spent on ingredients and she risked a drop in sales
if customers didn’t like the new item. But it was a hit. Sales increased.
Her employee received a small raise as a reward, but Carla was the one
who benefited the most because she owned the business.
Big Business versus Small Business
When people think of business, they tend to focus on large companies
such as Ford, Microsoft, and Nike. In reality, more businesses are con-
sidered small than big. Small firms employ about half of the U.S. private
work force, and they create around 64 percent of all new jobs. The Small
Business Administration (SBA), an agency of the U.S. government that
provides aid and advice to small businesses, defines a small business as
having fewer than 100 employees (fewer than 500 employees in the case
of manufacturing companies).
According to the SBA, over 600,000 new businesses are started in
the United States every year — and about 500,000 close. Even though
most businesses begin small, they obviously don’t all stay that way. An
entrepreneur’s goals affect how large a business becomes. For example,
suppose someone starts a neighborhood restaurant. The entrepreneur
may not want to expand the business to include more than one restaurant
if personal and financial needs are being met. Not everyone is interested
in increasing the size of the business.
In other cases, a business may become so successful that it grows
beyond the wildest expectations of its owners. That is exactly what hap-
pened to Whole Foods Market, Inc. It started in 1980 as one small store
in Austin, Texas. Four businesspeople decided the natural food industry
was ready for a supermarket format. And they were right! Beginning
with a staff of 19, Whole Foods Market was an immediate success. Now
Whole Foods Market is the world’s leader in natural and organic foods,
with more than 270 stores in North America and the United Kingdom
and over 54,000 employees worldwide.
One way you can gain a sense of what business is like is by investi-
gating an internship. These work programs provide practical, on-the-
job training in a business setting. Another word for an internship is an
apprenticeship. In some apprenticeships, a technical or trade skill is
taught, such as carpentry or plumbing. Internships and apprenticeships
are usually short-term programs that can last from a few weeks to a year.
During this time, an apprentice may or may not be paid. Even so, the
experience gained is helpful for either an employee or an entrepreneur.

What is an entrepreneur?

Why Be an Entrepreneur?
You might think of many reasons to start your own business. Before
doing so, however, it’s a good idea to consider the pros and cons of being
an entrepreneur. The key is evaluating whether the potential rewards
are worth more to you than the risks you will take.

Rewards of Being an Entrepreneur

You may think most people become entrepreneurs to make money.
After all, making a good living allows people to provide for their needs
and wants instead of depending on others. But more often the biggest
reward of becoming an entrepreneur is the feeling of self-sufficiency it
brings. Often there is a personal satisfaction that comes from having the
freedom to make your own business decisions and then act on them.
Additionally, you can display your aptitudes and skills for your family
and friends to see. Here are some additional advantages of being an
entrepreneur:
⦁ Making Your Own Rules. When you own a business, you
get to be your own boss. Depending on your business, you can
decide what type of schedule you work, where you work, and
how and when you get paid. You also have the final word on

Introduction to Entrepreneurship 7
 which products or services the business provides and how they
are provided. For example, when you have a creative idea, you
have the power to put that idea into action.
Figure 1-2 ▶
Making Your Own Rules
When you own a business, you are
your own boss.
Applying Concepts. What do
you think the advantages of being
your own boss would be? The
disadvantages?

⦁ Doing Work You Enjoy. The majority of most peoples’ lives is

spent working. Why not spend that time doing something you
enjoy? People tend to stay more focused and motivated when they
are passionate about their work. This helps a business succeed.
⦁ Creating Greater Wealth. Typically, employees can only make
the salary a company is willing to pay. However, there’s no limit
to what an entrepreneur can make. Entrepreneurs can also do
more than just make a living from their yearly business earnings.
A successful business, particularly one that keeps growing, can
often be sold for much more than the amount that was invested
in it.
⦁ Helping Your Community. Being an entrepreneur opens up
opportunities that help make your community and world a bet-
ter place in which to live. For example, entrepreneurs help oth-
ers by providing products or services needed by the community.
They also create jobs. Entrepreneurs often gain personal satisfac-
tion and community recognition from the time and money they
donate to worthy causes.

Risks of Being an Entrepreneur

Business ownership is not without risks. Here are some potentially stress-
ful disadvantages that usually come with being an entrepreneur:
⦁ Potential Business Failure. The flip side of getting to make
all the business decisions is the possibility of making the wrong
ones. Being fully responsible means the success or failure of your

8 Chapter 1
 ENTREPRENEURSHIP ISSUES

Serial Entrepreneurship
Most people who find something they love want to
keep doing it. Why should it be any different with
entrepreneurs? A growing percentage of people who
start successful businesses do it again. And again. This
is called serial entrepreneurship. These serial entrepre-
neurs take the lessons learned from their first busi-
nesses and apply them to new businesses.
For several reasons, serial entrepreneurship is more
common now than in the past. First, companies—par-
ticularly technology companies—develop and mature
more quickly now and can be sold while the founders
are still young. Second, resources for growing a com-
pany are more easily available because of the Internet
and the concentration of new businesses in certain
geographic areas, such as Silicon Valley in California.
With customers only a click away, many new busi-
nesses can become wildly profitable in just a few years.
Serial entrepreneurs report that they are not driven
by the desire for money so much as the impulse to
innovate and to challenge themselves. There are
resources specifically designed to help entrepreneurs
who want to start not one, not two, but several suc-
cessful businesses.
THINKING CRITICALLY
Comparing/Contrasting. Take some time to think
about the differences and similarities between a serial
entrepreneur and an entrepreneur who sticks to one
business. Write down two similarities and two differ-
ences these people might have.
For more information on serial entrepreneurship, go
to “Entrepreneurship Issues” on the Student Center
at entrepreneurship.pearson.com.

business rests on you. The time and money you invest in starting
and running a business just might not pay off.
⦁ Unexpected Obstacles. Problems can happen that you don’t
expect. This can be discouraging and frustrating unless you
choose to keep a positive attitude. Facing these challenges can get
scary and lonely, especially if you don’t have the emotional sup-
port of family and friends.
⦁ Financial Insecurity. The amount of money you can pay your-
self may go up or down, depending on how well your business is
performing. Many new businesses don’t make much money in the
beginning, so you may not always be able to pay yourself. During
rough times, you may even have to put more money into the
business just to pay your employees.
⦁ Long Hours and Hard Work. It’s not unusual for entrepreneurs
to work a lot of extra hours to make their businesses successful. This
is especially true during the initial start-up process. These long hours
can decrease the time you have available for your friends and family.
Until you can afford to hire other people to help, you may have to
perform many types of tasks. This will require discipline and a will-
ingness to do whatever needs to be done.

What are the risks and the rewards of being an

entrepreneur?

Introduction to Entrepreneurship 9
 Entrepreneurship in History
Entrepreneurship (on-trah-prih-NER-ship), the process of being an
entrepreneur, is more than just learning how to run a business. It can
affect the economy, your community, and ultimately the world in which
we live. Here is a brief list of examples of entrepreneurs who have changed
the world in one way or another.

The 1800s
⦁ At 12, Thomas Edison already showed signs of being an entre-
preneur. He was selling newspapers, candy, and snacks at the
local railroad station. By 14 he had his own newspaper busi-
ness. Gathering the daily news releases that were teletyped into
the station, he pulled out the “scoops” and convinced over
300 commuters to subscribe to his paper, which he called the
Weekly Herald. One of the most prolific inventors in history
and holding over 1000 patents, Edison is credited with
numerous inventions that contributed to mass commu-
nication. One of his inventions was the phonograph.
Edison’s greatest achievement, however, was creating
a practical and economical system to generate and
distribute electric light, heat, and power. That, and the
▲ Early Edison light bulb, changed the world forever.
phonograph
⦁ P.T. Barnum was 60 years old when his circus staged its first
show. The circus generated $400,000 in sales in the first year.
Later, it became known as the “Greatest Show on Earth” and
still tours all over the United States.

The 1900s
⦁ In 1903, two friends—William Harley and Arthur Davidson—
wanted to improve on the two-wheeled bicycle, and the motor-
cycle was born. Harley-Davidson was one of only two manufactur-
ers to stay afloat during the Depression of the 1930s. Now it has
out ridden its competition to become the world’s largest manufac-
turer of motorcycles, with revenues of over $41 million annually.
⦁ Maggie Lena Walker was a staunch advocate of human rights,
humanitarian causes, self-sufficiency, and race relations. With
the philosophy of turning “nickels into dollars,” she became the
first woman to charter a bank in the United States. Her bank,
the St. Luke Penny Savings Bank, opened in 1903 with receipts
totaling $9,430.44. Today it has assets of over $116 million. Now
known as the Consolidated Bank and Trust Company, Walker’s
bank is the oldest continuously operating minority-owned bank
in the United States. Actively committed to its philosophy, Walker
remained its chairperson until her death. Among her many honors,
she was inducted into the U.S. Business Hall of Fame, a school was
built in her honor, and her home is designated as a historic site.

10 Chapter 1
Present
⦁ In Sweden, Ingvar Kamprad learned at an early age how to
make money from available resources. By buying matches in
bulk at a low price, he could sell them in smaller quantities at a
higher price. He invested the money he made in this and other
small business ventures. When Kamprad was 17, he founded
IKEA, a furniture business. Today, IKEA has expanded to 300
stores in over 35 countries—and Ingvar Kamprad has become
one of the ten wealthiest people in the world.
⦁ Who can imagine a world without computers? In 1976, Stephen
Wozniak and Steve Jobs started a company with the goal of
bringing personal computers to everyone. To help pay for their
venture, they sold some of their personal possessions for a total
of $1,300. Weeks later, the first Apple computers were sold. In
1980, Apple went public and made Wozniak and Jobs multi-
millionaires. Today, Apple sells such popular devices as the iPod
and the iPhone.
⦁ When Russell Simmons was a young man, he turned his passion
for hip-hop into a venture that is now worth millions. His Def
Jam Recordings launched a cultural revolution and his vision
impacted music, fashion, film, television, and social action.
Named one of the Top 25 Most Influential People of the Past
20 Years by USA Today, Simmons started a movement that
not only created wealth but also changed America’s under-
standing of African-American culture.
⦁ In 1995, Dineh Mohajer wanted some light-blue nail pol-
ish to match her sandals. She decided to combine different
polishes in her bathroom to get the color she wanted. When she ▲ Apple’s iPod
wore her custom nail polish, lots of people noticed—and she
began taking orders as a result. Within two years her company,
called Hard Candy, had sales of $10 million and was producing
dozens of fancy colors.

Today’s Entrepreneurs
As in the past, present-day entrepreneurs pay attention to social trends
to attract customers. To be successful in today’s business world, most
entrepreneurs use the Internet in some way. In fact, more and more
companies are making the Internet their primary business resource.
Amazon.com is a good example, doing its business entirely on the Inter-
net. Typically, these companies use an electronic address that ends in
“com” and are sometimes referred to as dot-com companies.
Another contemporary trend is running a business in ways that
are friendly to the environment. A green company is one that adopts
business practices aimed at protecting or improving the environment.
For instance, Excellent Packaging & Supply distributes products made
from “green” resources. One of these products is SpudWare, utensils

Introduction to Entrepreneurship 11
 made from corn and potato starch that can withstand boiling water.
Another example of a green company is SELCO-India. It provides
solar-powered lighting to mostly rural areas in India and other devel-
oping countries.
Today, entrepreneurs operate all types of businesses. They are will-
ing to take risks because they hope for great rewards. In the process,
they help make life better for many people with the products, services,
and jobs they provide.

What is a green company?

Your Business Plan. Begin developing your standard business plan.

Go to Section 1.1 of the Business Plan Project in your Study Guide, or
Section 1.1 in BizTech.

ASSESSMENT 1.1

Reviewing Objectives Working Together

1. How do entrepreneurs and employees differ?
2. What are four rewards and four risks of being
an entrepreneur?
3. Name three successful entrepreneurs and
describe what they achieved.
Critical Thinking
. Applying Concepts. Choose an entrepreneur
from the past who is not discussed in this
chapter, and describe the risks and rewards
involved in starting his or her business.
Discuss whether the entrepreneur made life
better in some way with a product or service.
. Inferring. Why do you think an entrepreneur
might choose to keep a business small rather
than expand it?
Form a discussion panel to debate whether the
rewards of entrepreneurship outweigh the risks.
Half of the panel should focus on the rewards of
entrepreneurship and the other half on the risks.
Science
Conserving Natural Resources
Some natural resources, such as oil and
water, are becoming harder and harder to
obtain in many parts of the world. Trees
are being cut down faster than people can
plant and grow new ones. Use the Internet
to research ways that entrepreneurs, and
the employees that work for them, can help
conserve our natural resources. Present your
findings in a report.

12 Chapter 1