Gr. 11 Economics

Entrepreneurs are individuals who start their own businesses or aggressively expand existing ones

Organize productive resources (human, natural, capital) to make goods or services

Assume risk of financial failure

Decide what, how and for whom to produce based on signals from the market potential profits

Correct decisions big rewards (profits = revenues - costs) and incorrect decisions big losses (debt)

Consumers benefit from high quality, affordable goods of great variety

Go-getter attitude – recognize opportunities, optimistic

Risk taking – moderate Hard work – don’t notice the passage of

time

Motivation – work for themselves, make money

Self-confidence – rely on yourself rather than luck or friends

Objectivity – realize strengths and weaknesses and get expert help for weaknesses

80% of businesses fail in the first five years of existence

personal characteristics of entrepreneurs lazy, unknowledgeable, unskilled, poor planning, inexperienced

misunderstand market – unpopular product, priced too high or low, market too small

insufficient start up money

Pasadena, Newfoundland Federal government started in 1986 favourable environment for businesses to grow

Low rent – Year 1-2 (25%), Year 3 (50%), Year 4 (75%), Year 5 (110%)

Development officer – financing, business plans, cash-flow forecasts

Cost of sharing services – secretarial, photocopying, computers

Business advisory committee – lawyer, banker, accountant, business people

Franchise is a license from a corporation (franchiser) to a another corporation or individual (franchisee) to sell a particular good or service with an advertised trade name

Franchisee a semi-entrepreneur because less risk, less innovation, less self-reliance

Franchiser benefits from others money investment and hard work which allows them to expand business greatly

Franchisee benefits from proven business with less chance of 80% failure rate, but less freedom and must pay fees and % of profit to franchiser in return for trade name and assistance