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product
something tangible that exist in nature or is made by human beings
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service
intangible work that provides time, skill, or expertise in exchange for money
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entrepreneur
a person who organizes and manages a business assuming the risk for the sake of potential return
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economic questions
what, when, how, who, for whom
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free enterprise system
economic system in which businesses are privately owned and operate relatively free of government interference
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capitalism
free market system with competition, private ownership, and free-market prices
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captital
cash or goods invested to generate income and wealth
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voluntary exchange
transaction between two parties who agree to trade money for a product or service
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why be an entrepreneur?
- control over time
- fulfillment
- creation/ownership
- control over compensation
- control over working conditions
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benefits of being and entrepreneur:
- independence
- satisfaction
- financial reward
- self--esteem
- contribution to society
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cost of being an entrepreneur:
- business failure
- obstacles
- loneliness
- financial insecurity
- long hours/hard work
- strain on personal relationships
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opportunity cost
the value of what must be given up in order to obtain something else
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two good resources:
mentors and advisors
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social entrepreneurship
a for-profit enterprise that has dual goals of profability and social returns
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venture philanthropy
subset of social entrepreneurship where financial and himan capital is invested in not-profits by indivduals and for-profit enterprises for social gain rather than financial
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green entrepreneurship
- enterprise activities that avoid harm to the environment or help to protect in some way:
- create jobs
- increase energy efficiency
- decrease harm to workers health
- preserve limited natural assets
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Schumpter's definition:
- new tech - new product
- old tech - new product
- old tech - old product new way
- new source of resources
- new market - old product
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five roots of opportunity
- problems to solve
- changes in laws situations or trends
- inventions of new products or services
- competition to beat
- tech advantages to take advantage of
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strategy
a plan for how an organization or individual plans to go about its own performance and outdo that of its competitors
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gazelle
a company that achievs an annual growth rate of 20 percent or greater, typically by sales revenue
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microenterprise
firm with five or fewer employees, initial capitalization requirements uder 35000, regular operational involvement of owner
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lifestyle business
micro that permits its owners to follow a desired plan of living
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seven rules for successful business
- recognize opportunity
- evaluate critically
- build a team
- write plan
- gather resources
- decide ownership
- create wealth
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explain what entrepreneurs do
- start business and work for themselves
- recognize opportunity
- add value to scarce resources
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explain free enterprise and entrepreneurs
free enterprise encourages entrepreneurs who use resources efficiently to satisfy customer needs by rewarding them with profit
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a business opportunity is an idea plus these three characteristics
- attractive
- will work in business environment
- can be executed within window of opportunity (first mover advantage)
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use SWOT analysis to evaluate a business opportunity
- strengths
- weaknesses
- opportunities
- threats
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discontinuous innovation
ends old with a new product or service
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