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SHOULD YOU BECOME AN ENTREPRENEUR

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					    Chapter 1


    SHOULD YOU
    BECOME AN
    ENTREPRENEUR?
                    LESSONS
    1.1 Entrepreneurs: Present
        and Past
    1.2 Is Entrepreneurship
        Right for You?
    1.3 Identify Business
        Opportunities and Set
        Goals

    CHAPTER OVERVIEW
    Preview Ask students to read the chapter title out loud and discuss
    what might be covered in the chapter. Then have a student read each
    lesson title out loud and describe what might be covered in the lesson.
    Lesson 1.1
    Entrepreneurs: Present and Past
    This lesson describes entrepreneurs and the types of entrepreneurial
    businesses, the importance of entrepreneurship in our economy, and
    brief sketches of entrepreneurs in our history.
    Lesson 1.2
    Is Entrepreneurship Right for You?
    This lesson lists and describes characteristics of successful
    entrepreneurs along with analyzing suitability for entrepreneurship and
    advantages and disadvantages of entrepreneurship.
    Lesson 1.3
    Identify Business Opportunities and Set Goals
    This lesson describes ways to investigate opportunities and how to set
    financial and nonfinancial goals.
2
2
                                                                           TEACHING RESOURCES

BUILD A BUSINESS                                                           Instructor’s Resource CD
                                                                           • Lesson Plans, Ch. 1
                                                                           • PowerPoint Slides, Ch. 1
                                                                           • Video Discussion Guide, Ch. 1
Delia’s Dilemma                                                            Videocassette
                                                                           • Video segment, Ch. 1
                                                                           www.ideas-in-action.swep.com

“I   ’m so tired of someone telling
     me what to do all the time,”
Delia said to her friend Gloria.
                                       when we work, what we do,
                                       how we do it, and make lots
                                       of money! I can’t wait. When
                                                                           • Internet Activities, Ch. 1
                                                                           • Crossword Puzzle, Ch. 1
                                                                           ExamView® CD, Ch. 1
                                       do we start?”                       Workbook, Ch. 1
   “I know what you mean,”                                                 Activity Masters, Ch. 1
Gloria answered. “I get the                Gloria thought for a second     Chapter 1 Tests A and B
same thing.”                           before answering, “Well, Delia,
                                       it’s not really that easy. When     BUILD A BUSINESS
   “It seems like there should                                             • As students begin their study
be somewhere we could be in            we talked about this in class,        of entrepreneurship, some
charge,” Delia said. “There’s          Mr. Rivera said that there are a      will know what the term
                                       lot of things to consider before      entrepreneur means. Yet
got to be a better way.”                                                     others will have no idea. As
   “I’ve got an idea,” Gloria          starting a business. First, we        you open the chapter, ask
said, “let’s be entrepreneurs.”        need to decide what we like           students to define the word
                                       to do and what we are good            entrepreneur. Ask students
   “Entrepre . . . what?” ques-                                              what they think about when
tioned Delia.                          at. Then we have to do a lot          they think of someone who
   “Entrepreneurs,” Gloria             of research and planning if we        owns his or her own
                                       want to be successful.”               business. Do they think it is
answered. “Mr. Rivera talked                                                 easy? Do they think it is
about them in my business                  Thinking about what Mr.           hard?
class last week. They are peo-         Rivera told her in class, Delia     • Students are introduced to
                                       sighed, “This entrepreneur            • The concept of
ple who start and run their                                                    entrepreneurship
own businesses. We could do            thing sounds like a lot of            • The importance of
that!”                                 work. What do you think we              assessing skills and
                                       should do?”                             abilities in determining
   “What would we have to                                                      what business to start
do? Would we make a lot of                 Gloria could understand           • Resources for information
money? Would it be fun?                Delia’s dilemma. There are              on starting a business
                                       many advantages of owning           • At the end of Chapter 1,
Would we get to do whatever                                                  students will be asked to
we wanted?” Delia’s mind was           your own business, but there          reexamine the questions for
overflowing with questions.             are also many responsibilities        this case in What Do You
                                       and challenges that a business        Know Now.
   Gloria was getting very
excited as she replied, “We            owner has to face. Gloria           What Do You Know?
                                       knew that she and Delia had         Answers
could be our own boss! If we                                               1. Answers will vary. Some
were the owners, we would              their work cut out for them,           are Bill Gates, Ray Kroc,
be in charge! We’d get to              but she knew they could do it          Mary Kay Ash, Debbie
                                       if they put their minds to it.         Fields, and Ted Turner.
make all the decisions!”                                                      Be sure to differentiate
   “This is starting to sound          “Delia, I think we need to get         between the person who
pretty good,” Delia replied as         to the library as soon as possi-       starts a business and
                                       ble. We’ve got a lot of work to        someone who manages
she began to share Gloria’s                                                   a business.
excitement. “We could decide           do!”                                2. What they like to do, what
                                                                              they are good at, skills they
                                                                              have, if they can work
                                                                              independently, where they
                                                                              are going to get start-up
                                                                              money.
                                                                           3. Books and magazines on
                                                                              entrepreneurship, books
                                                                              about famous entrepre-
1. Who are some famous entrepreneurs in our country? Name some in             neurs, information on trends
                                                                              in the market.
   your local community.                                                   4. They could get more
                                                                              information from their
2. What kinds of things do you think Delia and Gloria should consider         parents, teachers, busi-
   before they decide to start a business?                                    nesses in the community,
                                                                              local Chamber of Com-
3. What resources do you think Delia and Gloria will find in the library?      merce, Small Business
                                                                              Administration.
4. Where else could they go to get help in making their decision about
   starting their own business?
                                                                                                         3
       GOALS                     Lesson 1.1
DEFINE
entrepreneurship.

LEARN about
entrepreneurship
                                 ENTREPRENEURS:
in history.

IDENTIFY the
                                 PRESENT AND PAST
impact of entre-
preneurs and small
business today.



                                 T
                                       he United States economy includes thousands of small busi-
SCHEDULE                               nesses. Many of these small businesses are owned and oper-
Block 45 minutes
Regular 1 class period                 ated by men and women who created their own companies.
TEACHING RESOURCES               But what makes someone an entrepreneur? What impact have
• Workbook Lesson 1.1            entrepreneurs had in history, and today?
FOCUS
Introduce Point out the
goals. Ask students what
they think they will learn or
                                  WHAT IS AN ENTREPRENEUR?
why they think the goals are
important. Ask a student to         People who own, operate, and take the risk of a business venture
read the opening paragraph       are called entrepreneurs. They are engaged in entrepreneurship,
out loud.
Motivate Ask students if they    the process of running a business of one’s own. Entrepreneurs come
know anyone who operates
his or her own business. Ask     from all types of backgrounds and create all kinds of businesses. All
them to describe what they       ages of people choose to become entrepreneurs. Some own tiny craft
know of the business. As an
alternative, ask students to     shops, while others own huge construc-
name a business near the         tion companies. Entrepreneurs try to
school that is probably
owned and operated by one        identify the needs of the marketplace
person.                          and to meet those needs by supplying a
TEACH                            service or product. When they succeed,
• Emphasize the definition
  of entrepreneur.               their businesses flourish and the profits
• Explain the difference         go to them. When they fail, their com-
  between an employee
  and an entrepreneur.           panies decline and they may have to go
  Entrepreneurs make
  decisions, take risks, and     out of business.
  are directly affected by the
  consequences. Employees
  may also make decisions        EMPLOYEES VS. ENTREPRENEURS Entrepreneurs assume risk. This
  but risk little and are not    makes them different from employees, who are people who work
  directly affected by the
  consequences.                  for someone else. Both may make decisions, but only the entrepre-
• Discuss why people             neur is directly affected by the consequences of those decisions.
  become entrepreneurs:
  to leave the corporate         Sam Jones manages a record store owned by Felipe Santiago. Sam
  environment, work at           decides to keep the store open until midnight during the week. If
  home, pursue a personal
  dream, and many other          the additional hours bring in customers and increase profits, Sam
  reasons.
                                 may be praised by Felipe. He may even get a raise. However, Sam
                                 won’t directly receive any of the profits because he is an employee.
                                 The earnings will flow to Felipe, the owner.

                                 WHY DO PEOPLE BECOME ENTREPRENEURS? People go into business for
                                 themselves for many reasons. Some want to leave the fast-paced
                                 corporate environment. Others want to be at home but still earn an
4        Chapter 1 • Should You Become an Entrepreneur?
income. Others want to pursue a personal dream. The reason you
might become an entrepreneur may be completely different from
these.
                                                                                       ONGOING ASSESSMENT
                                                                                       Checkpoint Entrepreneurs
                                                                                       assume risk and are their
                                        How are entrepreneurs different from           own bosses.
                                        employees?




TYPES OF ENTREPRENEURIAL BUSINESSES                                                In Clas
   There are many opportunities for entrepreneurs in each                       s Activity
                                                                    Gather in smal
type of business. Manufacturing businesses actually            List reasons yo      l groups.
                                                                               u would like
produce the products they sell. Using resources and          be an employe
                                                                            e. List reasons
                                                                                              to
supplies, they create everything from automobiles           would like to                    you
                                                                          be an entrepre
                                                           Compare and                     neur.
to paper. Wholesaling businesses sell products to                        discuss the re
                                                                                         asons.
people other than the final customer. For example,
a wholesaler supplies your local greeting card
store with items such as cards and wrapping
paper. Retailing businesses sell products
directly to the people who use or consume
them. Service businesses sell services rather than
products. They include hotels, hairdressers, and repair shops.            TEACH
                                                                                       • Describe the four types of
                                                                                         entrepreneurial businesses:
                                                                                         manufacturing,
Manufacturing           Wholesaling            Retailing           Service               wholesaling, retailing, and
                                                                                         service.
Apparel and             Apparel                Auto and home       Appliance repair    • Refer students to the chart
other textile                                  supply stores                             and discuss examples in
                        Electrical goods                           Automotive            the community of several
products
                        Groceries and          Building            repair                of the businesses listed.
Chemicals and                                  materials and                           • Ask students to think of
                        related products                           Babysitting           other examples in the
related products                               supply stores
                        Hardware,                                  Bookkeeping           community and correctly
Electronics and                                Clothing stores                           categorize them.
                        plumbing,
other electrical                                                   Consulting          COOPERATIVE LEARNING
                        heating                Florists
equipment                                                          Dance               Assign the In Class Activity
                        equipment
                                               Furniture stores                        to introduce students to
Fabricated                                                         instruction         working in groups and see
                        Lumber,
metal products                                 Gift, novelty,                          each others’ differing
                        construction                               Electrical
                                               and souvenir                            viewpoints on reasons for
Food products           materials                                  services            being an entrepreneur.
                                               stores
Industrial              Machinery,                                 Exterminators       TEACHING STRATEGIES
                                               Grocery stores                          Kinesthetic Learners
machinery               equipment,                                 Flower
and equipment           supplies               Hardware stores                         Give students a copy of
                                                                   decorating          the business pages of the
Printing and            Motor vehicles,        Jewelry stores                          telephone directory. Ask
                                                                   House cleaning      them to thumb through
publishing              automotive             Retail bakeries
                                                                   Lawn care           the pages to find additional
Rubber and              equipment                                                      kinds of businesses.
                                               Shoe stores
miscellaneous           Paper, paper                               Painting
plastic products        products               Sporting goods
                                                                   Plumbing
                                               and bicycle
Stone, clay, and        Petroleum,             stores              Translating
glass products          petroleum
                        products                                   Travel agency
                                                                   Tutoring

Source: Small Business Administration


                                                          Entrepreneurs: Present and Past • Lesson 1.1               5
ONGOING ASSESSMENT
Checkpoint Manufacturing
                                OTHER BUSINESS AREAS Two other categories of businesses are (1)
businesses produce products     agricultural and (2) mining and extracting businesses. Agricultural
to sell; wholesaling            businesses generate fresh produce and other farm products, such as
businesses sell products to
people other than the final      wheat. Mining and extracting businesses take resources like coal out
customer; retailing             of the ground so they can be consumed.
businesses sell products
directly to people who use
them; service businesses sell
particular services;                                       Describe different kinds of
agricultural businesses
generate fresh produce;                                    entrepreneurial businesses.
and mining and extracting
businesses take resources
out of the ground to be
consumed.
TEACH
• Explain that entrepreneur-     ENTREPRENEURS IN UNITED STATES HISTORY
  ship benefits a country by
  strengthening the                During the colonial years, entrepreneurship flourished. Entre-
  economy, changing how
  things are done by filling     preneurs raised crops such as rice and tobacco. They also worked
  unmet needs, and              as bankers, merchants, silversmiths, and candlemakers, to name a
  increasing productivity.
• Point out that in many        few career choices. After the American Revolution, the United States
  cases the historical          began to industrialize. Entrepreneurs invented machines that
  entrepreneurs described
  started businesses that are   increased productivity and helped the economy grow.
  large corporations today.
ENTREPRENEURIAL                 ENTREPRENEURS WHO CHANGED AMERICA
TIMELINE
Direct students to examine         Entrepreneurs change American business decade after decade.
the highlighted period in the   They establish huge companies or fill unmet needs. They constantly
timeline as they read about
Madam C. J. Walker’s            change how things are done and contribute to the overall good
business success. Ask           of the nation. In each chapter, you will learn something about
students what kinds of
obstacles Walker would have
had to overcome to succeed
in that era.




          1880                        1900                    1920                       1940

      The First Woman Millionaire
         Many entrepreneurs start by offering           where she and her daughter trained
      something they themselves need. That’s            other women to use and sell the product
      exactly what made Madam C. J. Walker a            line, which now included items such as
      millionaire. Walker began making her              complexion soap and dental cream. At
      own hair treatments in 1904. The treat-           least 20 women completed the program
      ments worked well, so Walker began                every six weeks. Besides becoming a mil-
      offering them to other African-American           lionaire from the sales of her products,
      women. She sold her products door-to-             Walker made a huge contribution to the
      door and bought ad space in newspa-               African-American community by empow-
      pers. Walker then opened Lelia College,           ering women to take pride in their work.



  6     Chapter 1 • Should You Become an Entrepreneur?
entrepreneurs in history, because they are an important part of what
the United States and the world have become today.

NINETEENTH CENTURY ENTREPRENEURS A machine that put a major
boost in the United States economy was the reaper. In 1831, Cyrus
McCormick took the reaper, which had already been invented, and
used it to mechanize the job of harvesting crops. McCormick had
$60 when he went to Chicago to set up a factory to manufacture
reapers. In time, the company that marketed his reapers evolved
into International Harvester, which produced farm equipment for
many years. Today this company is called Navistar International
Transportation Company and manufactures International brand
trucks.
    Lydia Moss Bradley, an entrepreneur from Peoria, Illinois, made
millions of dollars in investments and real estate. She transformed
seemingly unusable marshland into productive farm land. She also
founded Bradley University in 1896.
    John D. Rockefeller began working at the age of 16 as a clerk in
a small produce company. At 23, he had saved enough money to
enter the oil refinery business. By 1872, his company, Standard Oil,
owned all of the main oil refineries in Cleveland, New York,
Pittsburgh, and Philadelphia. Before long, Rockefeller controlled
almost all oil distribution in the United States. Eventually, he
became the richest man in the world.

EARLY 20TH CENTURY ENTREPRENEURS Entrepreneurs
remained very important in the twentieth century. For
example, Henry Ford developed and mass-produced the
Model-T automobile, which he sold at a price many
Americans could afford. A machinist from Detroit, Ford
created one of the largest companies in the world. Also
during the early part of the century, Olive Ann Beech co-
founded the Beech Aircraft Company with her husband.
She had always handled the financial aspects of the com-
pany and took part in major company decisions. She ran
the business when her husband became ill in 1940. With
Beech at the helm, the company continued to be a leader
in the aviation industry until merging with the Raytheon
Company in 1980.                                                     Henry Ford
   Clarence Birdseye pioneered the development of packaged frozen
foods in the 1920s. His developments had a major impact on eating
habits throughout the world. Rose Knox became another leader in the
food industry when she took over the Knox Gelatine Company in 1908.
Besides being an innovative business owner, she was the first to pro-
vide employees paid sick and vacation leave and a five-day work week.
                                                                       ONGOING ASSESSMENT
                                                                       Checkpoint Answers will
                           Name one historical entrepreneur and        vary.
                           describe what he or she did.


                                         Entrepreneurs: Present and Past • Lesson 1.1       7
ONGOING ASSESSMENT
Checkpoint Small
businesses employ the most
                                   ENTREPRENEURS TODAY
workers and contribute
billions of dollars to the U.S.      More than 5.8 million small businesses contribute billions of dollars
economy.                          every year to the United States economy. These small companies
RETEACH                           employ more workers than all of the country’s large corporations com-
Review answers to the
Checkpoints in the lesson.        bined. Small businesses are found in virtually every sector of the econ-
ENRICH                            omy. Companies such as Microsoft, Intel, and Apple all started as small
Critical Thinking Assign the      businesses. These companies have changed the workplace by making
Think Critically questions.
Connections Assign the            computers accessible to the world. Other entrepreneurial companies
Make Connections activities.      include Southwest Airlines, Mrs. Fields Cookies, and Estée Lauder
TECHNOLOGY                        Cosmetics. These companies make life more pleasant for consumers
• Encourage students to use
  a calculator for the Math       and provide employment to hundreds of thousands of workers.
  Connection and to explore          Small companies can be more creative and take more risks than
  the function of the % key.
• Encourage students to use       large companies. Their experimentation and innovation leads to
  word processing software        technological change and increased productivity. This makes small
  to write the scenario in the
  Communication                   business a significant part of the American economy. For this rea-
  Connection.                     son, many experts believe that small companies will play an
• Encourage students to do
  an Internet search for          increasingly important role in the future.
  information on Clarence
  Birdseye and daily eating
  habits in the 19th century.
CLOSE                                                              Why are small businesses so
Review the topics stated in
the Goals at the beginning of                                      important to our economy?
the lesson.




                                      1. What are your reasons for wanting to become an entre-
                                         preneur? Do you think they are common to all entrepre-
                                         neurs, or are some of your reasons unique? Answers
                                         may include independence, flexibility, and enjoying work.
                                      2. What other entrepreneurs in the 19th or 20th century
                                         have changed the American economy? How? Answers will vary.




                                      3. MATH Suppose there are exactly 5,812,000 small busi-
                                         nesses in the economy today. Approximately 27 percent
                                         of those businesses are service businesses. What is the
                                         number of service businesses in the economy?
                                         5,812,000   0.27    1,569,240
                                      4. COMMUNICATION Clarence Birdseye developed the
                                         first packaged frozen foods. He greatly influenced eating
                                         habits in the United States and throughout the world.
                                         What do you think a typical family’s daily eating habits
                                         were like at the end of the nineteenth century? Write a
                                         short scenario describing them. Student answers will vary,
                                         but should mention that the diet consisted of meat and starch (such as
                                         potatoes and bread) due to the lack of fresh vegetables.

  8      Chapter 1 • Should You Become an Entrepreneur?
Lesson 1.2                                                                    GOALS
                                                                         IDENTIFY the
                                                                         characteristics of

IS ENTREPRENEURSHIP                                                      successful
                                                                         entrepreneurs.


RIGHT FOR YOU?                                                           ASSESS whether
                                                                         you have what it
                                                                         takes to succeed in
                                                                         your own business.



M
          any people dream of running their own businesses. They
          would like to become entrepreneurs. Entrepreneurship            SCHEDULE
                                                                          Block 45 minutes
          can be exciting. But running your own business is diffi-         Regular 1 class period
cult. In fact, many companies started by entrepreneurs go out of          TEACHING RESOURCES
business. This is often caused by poor planning, lack of business         • Workbook Lesson 1.2
                                                                          • Activity Master 1
knowledge or entrepreneurial characteristics, or choosing the wrong
                                                                          FOCUS
business.                                                                 Introduce Point out the
                                                                          goals at the top of the page.
                                                                          Ask students what they think
 CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS                              they will learn or why they
                                                                          think the goals are important.
                                                                          Ask a student to read the
   Researchers have identified several characteristics that distinguish    opening paragraph out loud.
successful entrepreneurs from those that fail.                            Motivate Ask students to
                                                                          name a business in the
1. Successful entrepreneurs are independent. They want to                 community and another
                                                                          similar business that has
   make their own decisions and do something they enjoy.                  gone out of business.
                                                                          Discuss what the differences
2. Successful entrepreneurs are self-confident. Entrepreneurs              between the two businesses
   make all the decisions. They must have the confidence to make           might be.
   choices alone and bounce back from a poorly made decision.             TEACH
                                                                          • Discuss each characteristic
3. Successful entrepreneurs have determination and perse-                   of successful
                                                                            entrepreneurs.
   verance. Entrepreneurs persist through hard times until goals          • Ask students to think of an
   are met.                                                                 example to illustrate each
                                                                            characteristic.
4. Successful entrepreneurs are goal-oriented. They know what             • Ask students why each
                                                                            characteristic is important
   they want, and they are able to focus                                    to entrepreneurship.
   on achieving it.                                                             • Discuss why people
                                                                                  become entre-
5. Successful entrepreneurs have a                                                preneurs: to leave
                                                                                  the corporate
   need to achieve and to set high                                                environment, work at
   standards for themselves. They                                                 home, pursue a
                                                                                  personal dream, and
   are constantly setting challenging                                             many other reasons.
   new goals.
6. Successful entrepreneurs are
   creative. They think of new ways to
   market their businesses, and are always
   looking for new solutions to problems.
7. Successful entrepreneurs are able
   to act quickly. They are not afraid
   to make quick decisions when nec-
   essary, which helps them beat their
   competitors.

                                       Is Entrepreneurship Right for You? • Lesson 1.2              9
The vast majority of                                                      Small Businesses Dominate the U.S. Economy
businesses in the United                                            100
                                                                                90%
States are small busi-




                                Percentage of all U.S. businesses
                                                                     90
nesses that employ
fewer than 20 people.                                                80

                                                                     70

                                                                     60

                                                                     50

                                                                     40

                                                                     30

 There are 8.5                                                       20
 million women-                                                      10
                                                                                                    9%
 owned businesses                                                                                                      1%
 in the United States.                                                      20 or fewer          21–500           More than 501
 These businesses                                                                          Number of employees
 account for more
 than one-third of all              Ryan Nelson has many entrepreneurial characteristics. Since he
 businesses and                 was 14, Ryan played for his high school basketball team. Other
 generate $3.1                  boys his height—just 5’8”—would not have enjoyed competing with
 trillion in revenue.           much taller boys. Ryan accepted that he would have to work harder
                                to win. He needed to be creative in handling the ball. Most of all,
                                he had to believe in himself. He did, and became one of the top
DID YOU KNOW?                   players on his team. If Ryan opened his own business, the charac-
Direct students to read the
Did You Know? feature. Ask      teristics he displayed as a ball player might help him succeed.
students if they know any
businesses owned by
women.
ONGOING ASSESSMENT                                                                        Name three important characteristics
Checkpoint Answers will                                                                   of entrepreneurs.
vary, but may include
independence, creativity,
and self-confidence.
TEACH
• Demonstrate how to read
  the graph at the top of
                                             ASSESS YOUR SUITABILITY FOR ENTREPRENEURSHIP
  the page.
• Emphasize that the graph          Entrepreneurship is not for everyone. Some people lack the qual-
  demonstrates that most        ities needed to become successful entrepreneurs. Others lack the
  businesses in the U.S.
  are entrepreneurships.        aptitude needed to run a business. For others, the benefits of entre-
• Ask students to point out     preneurship do not outweigh the disadvantages.
  which characteristics of
  entrepreneurship apply            To determine if entrepreneurship is right for you, you first need
  to Ryan Nelson described      to perform a self-assessment, an evaluation of your strengths and
  in the paragraph under
  the graph.                    weaknesses. You can do this in a number of ways. You can list
• Point out that not everyone   your strengths and weaknesses on a sheet of paper. You can ask
  is suitable for
  entrepreneurship.             others what they believe your strengths are and where your weak-
• Explain how self-
  assessment can evaluate       nesses lie. There are also tests you can take to assess your abilities.
  personal strengths and
  weaknesses for
  entrepreneurship.             ASSESS YOUR INTERESTS
                                   Success as an entrepreneur requires a strong commitment to a
                                business and a lot of energy. To be able to commit yourself fully to a
                                business, you should choose a field that interests you and that will
                                provide you with an experience you will enjoy.

10      Chapter 1 • Should You Become an Entrepreneur?
HOBBIES AND INTERESTS Many entrepreneurs
center a business on an interest or hobby. Tricia
Johnson loved reading mysteries and was interested
in book collecting. Tricia created Royal Books, a com-
                                                                                 ONGOING
pany that buys and sells new, used, and rare books,                            ASSESSMENT
especially mystery books. Making a list of hobbies and                        Checkpoint Interest and
                                                                             enjoyment.
interests can help you decide what business is right for
                                                                              TEACH
you.                                                                             • Explain how hobbies,
                                                                                       interests, and past
                                                                                           experiences may
PAST EXPERIENCES Analyzing past ex-                                                          suggest the
periences and jobs can help you decide                                                        type of
                                                                                               business to
on a business you would enjoy owning.                                                          enter.
Samantha Rodriguez worked as a cus-                                                             • Point out
                                                                                                  that interest
tomer service representative for a large                                                          and
company. Recognizing that she wanted                                                              enjoyment
                                                                                                  are key
a job where she could spend time out-                                                             factors for
                                                                                                  business
doors, Sam formed her own bicycle                                                                 success.
messenger service. She now earns less                                                           • Define
                                                                                                  aptitude as
money than she did as a customer ser-                                                             the ability to
vice representative, but she enjoys the                                                           learn a
                                                                                                  particular
work that she is doing.                                                                           kind of job.
                                                                             Explain that different jobs and
                                                                             businesses require different
                                                                             kinds of aptitudes.
                               Name key factors that aid an entre-           • Point out the difference be-
                               preneur’s commitment to a business.             tween interest and aptitude.
                                                                             COOPERATIVE LEARNING
                                                                             Assign the In Class Activity
                                                                             to encourage group
                                                                             interaction. Ask students to
ASSESS YOUR APTITUDE                                                         write the suggested possible
                                                                             jobs that match their own
    Different jobs require different job aptitudes. Aptitude is the abil-    personal interests in their
ity to learn a particular kind of job. Auto mechanics must possess           notes.
an aptitude for solving mechanical problems. They also must be
good with their hands. People who sell insurance must have good
interpersonal skills. Answering questions like those in the Job
Attributes Checklist can help you identify the kinds of entrepreneur-
ial opportunities that might match your aptitudes and interests.

                                                                       In Class Activit
  JOB ATTRIBUTES CHECKLIST                                               As a class,
                                                                                       y
                                                                                      suggest ten
                                                                       possible jobs
     1.   I   enjoy working with numbers.                                            for each item
                                                                    on the job attr
                                                                                   ibutes checkl
                                                                    Choose two p                 ist.
     2.   I   enjoy working outdoors.                                              eople to write
                                                                   down all the
     3.   I   enjoy working with my hands.                                       suggestions on
                                                                  the chalkboard
                                                                                  or on paper.
     4.   I   enjoy selling.
     5.   I   like working with people.
     6.   I   prefer to work alone.
     7.   I   like supervising other people.
     8.   I   like knowing exactly what it is I am supposed to do.


                                         Is Entrepreneurship Right for You? • Lesson 1.2                   11
ONGOING ASSESSMENT
Checkpoint The ability to
learn a particular kind of job.                             What does it mean to have an
                                                            aptitude for something?



WWW
NET WORTH
  Point your browser to
                                  ASSESS THE ADVANTAGES OF ENTREPRENEURSHIP
                                     Many people see significant advantages in owning their own
www.ideas-in-action.swep.com      businesses.
   Complete the activity          1. Entrepreneurs are their own bosses. Nobody tells an entre-
      for Chapter 1.                 preneur what to do. Entrepreneurs control their own destinies.
                                  2. Entrepreneurs can choose a business that interests them.
TEACH                                Entrepreneurs work in fields that interest them. Many combine
• Describe each of the               hobbies and interests with business.
  advantages of
  entrepreneurship.               3. Entrepreneurs can be creative. Entrepreneurs are always
• Ask students if being their
  own boss appeals to them.          implementing creative ideas they come up with themselves.
• Ask students if working in
  a field that interests them      4. Entrepreneurs can make lots of money. Entrepreneurship
  is better than working in          involves risk. This means that entrepreneurs can make a lot of
  a field that does not.
• Ask students to think of           money if their business succeeds.
  an occasion in which they
  did something creative and
  to describe the feeling of      ASSESS THE DISADVANTAGES OF ENTREPRENEURSHIP
  satisfaction that came
  from it.                           There are also disadvantages to being an entrepreneur. They
• Point out that although         include the following:
  there are risks of entre-
  preneurship, the other          1. Entrepreneurship is risky. All small businesses face the possi-
  side is the possibility of
  earning a lot of money.            bility of going out of business or of losing money.
• Emphasize the disadvan-         2. Entrepreneurs face uncertain and irregular incomes.
  tages of entrepreneurship.
  Students will tend to              Entrepreneurs may make money one month and lose money
  glamorize the advantages
  and underestimate the              the next.
  disadvantages.
• Point out that small busi-
  nesses often fail and
  owners lose their
  investments.
• Explain how income from
  small businesses can be
  uncertain or irregular.




12       Chapter 1 • Should You Become an Entrepreneur?
3. Entrepreneurs work long hours. Entrepreneurs never really                       TEACH
                                                                                   • Explain the time commitment
   are finished with their jobs. They can work long, irregular hours.                 required in entrepreneurship.
   They receive no paid days off, and they may have to work                          Students often think that
                                                                                     being their own boss means
   evenings and weekends.                                                            not having to work very
                                                                                     hard.
4. Entrepreneurs must make all decisions by themselves.                            • Draw the connection
   Unless they have partners, entrepreneurs must make all the                        between the quotation in
                                                                                     You Can Say That Again!
   decisions alone.                                                                  and the fourth disadvantage
                                                                                     of entrepreneurship.
                                                                                   ONGOING ASSESSMENT
                                                                                   Checkpoint Advantages:
                                    What are advantages and dis-                   Entrepreneurs are their own
                                    advantages of entrepreneurship?                bosses, can choose a
                                                                                   business that interests them,
                                                                                   can be creative, and can
                                                                                   make lots of money.
                                                                                   Disadvantages: Entrepreneurs
                                                                                   take risks, face uncertain




  “
                                                                                   incomes, work long hours,
       You can say that again!                                                     and make all decisions




                                                                               ”
                                                                                   alone.

               “The thing you have to remember                                     RETEACH
                                                                                   Review the answers to the
                 is that you can’t blame anyone                                    Checkpoints in the lesson.
                     else for your mistakes.”                                      ENRICH
                                                                                   Critical Thinking Assign the
               —Vinita Gupta, creator of Digital Link                              Think Critically questions.
                                                                                   Connections Assign the
                                                                                   Make Connections activities.
                                                                                   TECHNOLOGY
                                                                                   • Encourage students to use
                                                                                     a calculator for the Math
                                                                                     Connection.
                                                                                   • Encourage students to use
                                                                                     word processing software
                                                                                     to complete the
   1. Entrepreneurs can fail even if they are committed and                          Communication
      have the characteristics needed to be successful. Why do                       Connection. Students may
                                                                                     use the cut and paste or
      you think this can happen? Answers may include: because there                  move functions to put the
      was not a market for the product or service or ineffective management.         advantages in order.
   2. Why is it important for entrepreneurs to choose a field                       CLOSE
      that they will enjoy? If they do not enjoy the business, they will lose      Review the topics stated in
       interest and the business will fail.                                        the Goals at the beginning of
   3. Do you think the advantages of entrepreneurship out-                         the lesson.
      weigh the disadvantages? Why or why not? Some students
       will say yes, others will say no. Personal opinion will determine how
       students answer.




   4. MATH One in four small companies begun this year will
      be out of business within the next two years. What per-
      centage is this? Six years from now, nearly two-thirds of
      all businesses started this year will no longer be open.
      What percentage is this?
      One in four = 1     4    25%; two-thirds = 2   3   67% (rounded).
   5. COMMUNICATION Rank the advantages of entrepre-
      neurship in order of importance to you. The item ranked
      “1” is most important to you and the item ranked “4” is
      the least important. Write a paragraph explaining your
      rankings. Answers will vary.


                                                 Is Entrepreneurship Right for You? • Lesson 1.2             13
       GOALS                      Lesson 1.3
RECOGNIZE different
businesses you could
start.

IDENTIFY your own
                                  IDENTIFY BUSINESS
personal goals.
                                  OPPORTUNITIES AND
SCHEDULE
                                  SET GOALS
Block 45 minutes
Regular 1 class period



                                  M
TEACHING RESOURCES                         illions of entrepreneurs in the United States start their own
• Workbook Lesson 1.3                      businesses. How did they decide what businesses to oper-
• Activity Master 2
FOCUS
                                           ate? How can you learn about the business opportunities
Introduce Point out the           available to you? What kinds of goals should you set for yourself?
goals at the top of the page.
Ask students what they think
they will learn or why they
think the goals are important.     INVESTIGATE OPPORTUNITIES
Ask a student to read the
opening paragraph out loud.                                           The library has resources that
Motivate Ask students to
think of a kind of business                                        can help you examine different
that is not located in their                                       opportunities. These include books
community and that now
requires a great deal of travel                                    on entrepreneurship, magazines
to get to the nearest one. Ask
if there is enough demand in                                       for entrepreneurs, trade magazines
the community to open that                                         for certain businesses, and govern-
kind of business nearby.
                                                                   ment publications. County Business
TEACH
• Point out that deciding                                          Patterns is an annual series of publi-
  what kind of business to                                         cations providing economic profiles
  operate is a business
  decision that requires                                           of counties, states, and the United
  identifying what the                                             States as a whole. Data include
  opportunities are.
• Describe sources of             employment, payroll, and number of establishments by industry.
  investigating opportunities:       The library is not the only place to investigate opportunities. The
  books and magazines,
  business trade magazines,       Small Business Administration (SBA) is an organization that exists
  and government                  to help small businesses and their owners. It publishes information
  publications.
• Emphasize that the Small        that may be helpful. Talking to entrepreneurs and attending trade
  Business Administration
  exists to help small            shows, which are special meetings where companies display their
  businesses and their            products, can also be beneficial.
  owners, and it publishes
  a lot of information.              Luanda Williams wanted to use her love of sports and dancing to
• Emphasize that talking          create her own company. She found books and magazine articles at
  to entrepreneurs and
  attending trade shows are       the library that gave her information on various kinds of businesses.
  other ways of investigating     She also talked to owners of gymnastic centers, health clubs, and
  opportunities.
                                  dance studios. Her research helped her come up with the idea of
ONGOING ASSESSMENT
Checkpoint From the library,      opening a gymnastics and fitness center for children.
the SBA, attending trade
shows, and talking to other
entrepreneurs
                                                              How can you find out about various
                                                              business opportunities?


14       Chapter 1 • Should You Become an Entrepreneur?
COMPARE DIFFERENT OPPORTUNITIES                                           In Class Activit
    Once you find some appealing businesses, you need                     In small group   y
                                                                                     s, brainstorm
to identify which have the best chance for success. Now           a list of resour
                                                                                   ces for finding
                                                                information ab
is the time to assess each business idea by asking            that sells auto
                                                                                  out a compan
                                                                                                  y
yourself the following questions:                                             mobile access
                                                                                             ories.
1. Is there a market in my community for this kind of
    business? Will people buy my product or service?
2. How much money would it take to start this
    business? Will I be able to borrow that much
    money?
3. How many hours a week is it likely to take to run
    this business? Am I willing to commit that much time?
4. What are the particular risks associated with this business? What          COOPERATIVE LEARNING
                                                                              Assign the In Class Activity
    is the rate of business failure?                                          to encourage group
5. Does my background prepare me to run this kind of business?                interaction. Point out that
                                                                              group brainstorming usually
    Do most people who own this kind of business have more                    produces more ideas than a
    experience than I do?                                                     single individual could
                                                                              produce.
6. How much money could I make running this business?
                                                                                 ONGOING ASSESSMENT
                                                                                 Checkpoint Answers may
                                                                                 include: Is there a market for
                                                                                 this business? How many
                               What are some questions you need to               hours will I have to work?
                               ask to help determine if the business             How much money could I
                                                                                 make?
                               opportunities you listed are realistic?
                                                                                 TEACH
                                                                                 • Explain that it is not
                                                                                   enough to identify and
                                                                                   select appealing
                                                                                   businesses, but they must
                                                                                   also be evaluated to
 SETTING GOALS                                                                     identify which have the
                                                                                   best chance for success.
                                                                                 • Select a small business
  For everything you do in life, you set goals. As an entrepreneur,                that would interest your
                                                                                   students and discuss the
you will need to set financial and nonfinancial goals.                               six questions for this
                                                                                   business.
                                                                                 • Explain that entrepreneurs
FINANCIAL GOALS Financial goals can include how much money you                     must set two kinds of
will earn and how quickly you will pay off debts. Make sure your                   goals: financial and
                                                                                   nonfinancial.
goals are realistic. They should be easily attainable. If one of your            • Explain why financial goals
first goals is to make lots of money early on, you almost certainly                 must be realistic to avoid
                                                                                   certain disappointment.
will be disappointed. It usually takes time for businesses to be                 • Point out that most
                                                                                   businesses begin
financially viable. Most businesses begin operations by borrowing                   operations by borrowing
money. These debts usually are paid within one to five years. This                  money that may take a
                                                                                   number of years to repay.
means that at first, an entrepreneur may earn less than he or she
would have earned working as an employee.
   Setting specific financial goals before starting a business can
ensure a business is able to earn the profits you want. Mo Yang
wants to start a mail-order business for model trains, planes, and
cars. He estimates that after expenses he would earn $9
for each item he sold. At this rate of profit, he would
have to sell 3,000 models to meet an income goal of
$27,000 a year. This showed Mo that he would have to
lower his income goal or find another business idea,
because he would probably not be able to sell that many models.
                              Identify Business Opportunities and Set Goals • Lesson 1.3                    15
TEACH
• Explain nonfinancial goals.
                                     NONFINANCIAL GOALS Most
• Ask students what kinds of         people who own their own
  nonfinancial goals would be         businesses do so for more
  important to them.
WHAT WENT WRONG?
                                     than just monetary gain.
The What Went Wrong?                 They are looking for per-
feature is a case that shows
a business failure. Students         sonal satisfaction. They may
analyze the case to see the          serve a community need,
kinds of mistakes business
owners may make so                   do something they like, or
that they can avoid those            enjoy the personal inde-
mistakes in their own
entrepreneurial careers.             pendence of being an
Think Critically Answers             entrepreneur. You will
1. Ability to act quickly, creati-   want to specify what nonfi-
   vity, determination, goal
   orientation, self-confidence       nancial goals you want to
2. The loss of the former            get out of being an entre-
   owner as a mentor and
   losing the chief printer          preneur.
   hindered her ability to              Mark and Cindy Baird
   keep the business going
   smoothly.                         own Outdoor Exploration,
                                     a company specializing in




     Is Entrepreneurship Right for You?
     Be Sharp or Fall Flat
     Business: Print Here!, San Francisco, CA * Open for business 5 months
        Louise was an opera singer, but it wasn’t              The former owner left town earlier than
     a financially viable career. She earned addi-            planned. Then Louise’s chief printer quit.
     tional money working at a copy shop in                  With the schedules of her part-time
     San Francisco. The elderly couple who                   employees, Louise was frantically trying to
     owned the shop gave flexible hours to                    get large orders out on time. With no for-
     employees with aspiring music careers.                  mal business training and no management
     Sadly, the husband died and the wife                    experience, Louise couldn’t begin to deal
     decided to sell the business and go to                  with all these problems, problems even a
     Cincinnati. Louise grabbed the opportunity.             veteran would find difficult. She ended up
        The former owner helped Louise gather                selling the business at a $50,000 loss.
     financial information and put together a
     business plan. Louise’s uncle co-signed on
     a bank loan, and she was in business. She
                                                             Think Critically
     modernized the décor of the shop. Louise                1. What characteristics did Louise possess
     contacted all the existing customers to                    that led her to become an entrepre-
     assure equal or better service. Sales                      neur?
     increased the first two months. But                     2. What circumstances out of Louise’s con-
     then. . .                                                  trol led to the failure of this business?



16        Chapter 1 • Should You Become an Entrepreneur?
backpacking, white-water rafting, and mountaineering trips. The      ONGOING ASSESSMENT
                                                                     Checkpoint Financial goals
Bairds had a dream to help disabled children experience the out-     are set to make sure the
doors. Last year, they began offering inexpensive outdoor programs   business will earn a profit.
                                                                     Nonfinancial goals include
to children with Down’s syndrome and cerebral palsy. Mark and        serving the community and
                                                                     personal satisfaction.
Cindy experienced an enormous sense of satisfaction in seeing
these children enjoy themselves outdoors.                            RETEACH
                                                                     Review the answers to the
                                                                     Checkpoints in the lesson.
                                                                     ENRICH
                                                                     Critical Thinking Assign
                          Why are financial goals important?          the Think Critically questions.
                                                                     Connections Assign the
                          Name some nonfinancial goals an             Make Connections activities.
                          entrepreneur may have.                     TECHNOLOGY
                                                                     • Encourage students to
                                                                       use a calculator for the
                                                                       Math Connection.
                                                                     • Encourage students to
                                                                       use word processing
                                                                       software to complete
                                                                       the Communication
                                                                       Connections.
                                                                     CLOSE
                                                                     Review the topics stated in
   1. Choose a business idea that appeals to you. For this busi-     the Goals at the beginning
                                                                     of the lesson.
      ness, answer the six assessment questions listed in this
                                                                     ANSWERS
      lesson on a sheet of paper. Is this a realistic choice for     Think Critically
      you? Why or why not?                                           1. Answers will vary.
                                                                     2. Financial goals may be
   2. In terms of annual income, what financial goals have you           owning property or more
                                                                        than one business.
      set for yourself for five years after you graduate? What           Nonfinancial goals may be
      nonfinancial goals have you set that becoming an entre-            independence and
                                                                        flexibility.
      preneur can help you achieve? Are financial or nonfinan-         Make Connections
                                                                     3. $15,000 $10 1,500
      cial goals more important to you? Why?                            lessons. The goal is
                                                                        realistic if the lessons are
                                                                        kept to one hour. You can
                                                                        give 6 lessons a day for 5
                                                                        days a week (regular work
                                                                        week). Assuming you
                                                                        work 50 weeks a year (2
   3. MATH You live near the beach and have a passion for               weeks vacation), you
                                                                        would give 30 lessons a
      snorkeling. Your dream is to give snorkeling lessons. You         week for 50 weeks (1,500
      estimate that after expenses, you can earn $10 per lesson.        lessons in a year).
                                                                     4. Answers will vary, but
      Your income goal is $15,000 per year. How many lessons            should include all of the
      do you need to give to achieve this goal? Is this goal            topics listed in the activity.
                                                                     5. Answers will vary.
      realistic?
   4. COMMUNICATION Write a letter to the Small Business
      Administration. In your letter, indicate your interest in
      starting a small business. Be specific about the type of
      business you wish to start. Ask what specific services the
      SBA provides to people who wish to start this type of
      business. Give your letter to your teacher.
   5. COMMUNICATION Make a list of personal nonfinancial
      goals you would like to achieve through entrepreneur-
      ship. Choose one of these goals. Write an outline for a
      detailed plan you can follow to achieve this goal.


                          Identify Business Opportunities and Set Goals • Lesson 1.3              17
 Chapter Summary
                               1. An entrepreneur is a person who owns, operates, and takes the
                                    risks of a business venture. Entrepreneurs try to identify and
                                    meet a need for a product or service.
                               2.   Entrepreneurs come from all types of backgrounds, and they
                                    own all kinds of businesses including manufacturing, retailing,
      ENTREPRENEURS:                and service businesses.
             PRESENT           3.   Throughout U.S. history, there have been many entrepreneurs
            AND PAST                who have contributed to the economy.
                               4.   Today, more than 5.8 million small companies still contribute
REVIEW                              greatly to the U.S. economy.
Review each point in the       5.   Small businesses generally are more creative and willing to take
Chapter Summary.
                                    risks than large corporations.

                               6. There are a number of characteristics successful entrepreneurs
                                    possess, such as independence and determination.
                  IS           7. To determine whether entrepreneurship is for you, you will need
   ENTREPRENEURSHIP                 to assess your strengths, weaknesses, interests, and aptitudes.
     RIGHT FOR YOU?            8. Advantages of owning your own business include being your
                                    own boss and working in a field that interests you.
                                    Disadvantages include uncertainty, risk, and the need to work
                                    very long hours.

                               9. There are many resources at your public library that can help
                                  you develop a list of business ideas. Trade shows can also give
                                  you valuable information.
                              10. Once you have identified several opportunities, ask yourself key
              IDENTIFY            questions to analyze each option and identify the kind of busi-
             BUSINESS             ness that makes the most sense for you.
        OPPORTUNITIES         11. Financial goals should include how much money you want to
        AND SET GOALS             earn from your business. Setting specific financial goals will
                                  help you determine if your business idea will make the profits
                                  you want.
                              12. Nonfinancial goals can include serving a community need,
                                  working at something you enjoy, or maintaining the indepen-
                                  dence that comes with entrepreneurship.

PRACTICE
Assign What Do You Know
Now? to provide practice in
applying new knowledge          Read Build a Business again. Then answer the questions a second time.
from the chapter.
                                How have your responses changed?

18
18      Chapter 1    Should You Become an Entrepreneur?
        Chapter 1 •• Should You Become an Entrepreneur?
                                                                          ASSESS
                                                                          Assign Vocabulary Builder and
                                                                          Review Your Knowledge to
VOCABULARY BUILDER                                                        assess student understanding.
                                                                          ANSWERS
   Choose the term that best fits the definition.                           Review Your Knowledge
                                                                           7. Entrepreneurs are different
Write your answers on a separate sheet                                        from employees because
of paper.                                                                     they assume risk.
                                                                           8. To leave the fast-paced
   1. People who work for someone                                              corporate environment;
      else bb                              a. aptitude                         to be at home but still
                                                                               earn an income; to
   2. Evaluation of your strengths and b. employees                            pursue a personal dream.
                                            c. entrepreneurs               9. Manufacturing: produce
      weaknesses e                                                             the products they sell
   3. Special meetings at which com-       d. entrepreneurship                 using resources and
                                                                               supplies. Wholesaling:
      panies display their products f      e. self-assessment                  sell products to people
   4. People who own, operate, and          f. trade show                      other than the final
                                                                               customer; Retailing: sell
      take the risk of a business ven-                                         products directly to the
                                                                               people who use or
      ture c                                                                   consume them; Service:
                                                                               sell services rather than
   5. The ability to learn a particular kind of job a                          products; Agricultural:
   6. The process of running a business of one’s own d                         generate fresh produce
                                                                               and other farm products;
                                                                               Mining and extracting:
                                                                               take resources out of the
                                                                               ground so they can be
                                                                               consumed.
REVIEW YOUR KNOWLEDGE                                                     10. Answers will vary (exam-
                                                                               ples in text: Cyrus
 7. How are entrepreneurs different from employees?                            McCormick, Madam C. J.
                                                                               Walker, Lydia Moss
                                                                               Bradley, John D.
 8. Why do some people go into business for themselves?                        Rockefeller, Henry Ford,
                                                                               Olive Ann Beech,
 9. Name all the different kinds of entrepreneurial businesses and             Clarence Birdseye, Rose
                                                                               Knox).
    describe what each produces.                                          11. Entrepreneurial com-
                                                                               panies employ more
10. Name two early American entrepreneurs and what they did.                   workers than all of the
                                                                               country’s large corpora-
11. Why are entrepreneurial companies important to our economy?                tions combined.
                                                                          12. 1. Independence, 2. Self-
                                                                               confidence, 3. Determi-
12. What are the seven characteristics of successful entrepreneurs?            nation and perseverance,
                                                                               4. Goal orientation, 5. A
13. Why is it important for a beginning entrepreneur to perform a              need to achieve and set
                                                                               high standards for
    personal assessment?                                                       themselves, 6. Creativity,
                                                                               7. Ability to act quickly.
14. Why should entrepreneurs take past experiences into account when      13. You must know your
                                                                               strengths and weak-
    deciding to start their own business?                                      nesses and make sure
                                                                               that you are choosing a
15. Why is it important to have an aptitude for the business you decide        field that interests you
                                                                               and that will provide you
    to own?                                                                    with an experience you
                                                                               will enjoy.
16. List the four advantages and four disadvantages of                    14. They can help you
                                                                               evaluate what you liked
    entrepreneurship.                                                          or didn’t like about a
                                                                               certain situation.
17. What resources can you use to research business opportunities?        15. To be successful, you
                                                                               need to be proficient at
18. Why should you set both financial and nonfinancial goals for yourself        whatever skill is neces-
                                                                               sary to run your
    as an entrepreneur?                                                        business.



                                                               Chapter Review • Chapter 1           19
16. Advantages:
    1. Being your own boss,
                                  APPLY WHAT YOU LEARNED
    2. Choosing a business        19. The six categories of privately owned businesses include manufac-
    that interests you,
    3. Being creative,                turing, agricultural, mining and extracting, retailing, wholesaling, and
    4. Making lots of money.
    Disadvantages: 1. Risky,          service. In small groups, brainstorm specific industries and compa-
    2. Uncertain and                  nies that belong to each category of business. Make a list of indus-
    irregular income, 3. Long
    hours,                            tries and companies for each type. Share your results with the class.
    4. Making decisions
    alone.                        20. In groups, brainstorm a list of jobs that relate to each aptitude given
17. Books on entrepreneur-
    ship, magazines for               in Lesson 1.2. For each job listed, have members vote on which
    entrepreneurs, trade
    magazines for certain             ones they would like to do. Are there any jobs that received more
    businesses, government            votes than the others? What are the aptitudes involved in these
    publications, County
    Business Patterns, The            jobs? Share your results with the class.
    Small Business
    Administration
18. Setting financial goals
    before starting a busi-
    ness can ensure that it
    will be able to earn the
    profits you need. Setting
    nonfinancial goals is
    important because the             21. How is entrepreneurship today different from entrepre-
    goals will help you                   neurship during colonial times?
    understand why you
    want to be an
    entrepreneur (what you            22. What is the relationship between interest in and apti-
    want to get out of the                tude for a particular field? Can interests and aptitudes
    experience).
Apply What You Learned
                                          be the same? Why or why not?
19. Answers will vary, but
    will be similar to the            23. Other than going to the library and attending trade
    chart in Lesson 1.1.                  shows, can you think of other ways to investigate busi-
20. Answers will vary.
Think Critically                          ness opportunities?
21. Entrepreneurs today
    have many more                    24. Why is setting realistic financial goals important to cre-
    choices. Prior to                     ating a successful company?
    industrialization, there
    were few ways to strike
    out on one’s own.
    Technology has made
    entrepreneurship
    possible for many more
    people. These people are
    creating products and             25. MATH Ellen Greenberg loves to make and fly kites.
    offering services that
    were not needed                       Ellen is planning to open a shop selling custom-made
    decades ago.
22. A particular field may be              kites. She asks for your advice to help her set financial
    of interest to you, but you           goals. Ellen estimates that after expenses, she can make
    may not have the
    aptitude or skills                    a $15 profit on each kite she sells. If her annual income
    necessary to compete in
    that field. Interests and              goal is $15,450, how many kites will she have to sell? Is
    aptitudes are often                   this goal realistic?
    similar. Most people are
    interested in things that
    they have an aptitude for.        26. RESEARCH Find information on the life and career of
23. Answers will vary, but                a famous historical entrepreneur. Find out information
    students may list
    newspaper                             such as birthplace, the type of business started, and
    advertisements, trade
    magazines, etc.                       what effect the person had on the economy and history.
24. If the financial goals                 Is the business still operating? Write a short report
    are not realistic, the
    entrepreneur will be                  about your findings.
    discouraged and may
    not continue the venture.         27. COMMUNICATION For the above Research question,
                                          find a creative way to present your findings to the class.
                                          Use visual aids, skits, costumes, games, etc.


20       Chapter 1 • Should You Become an Entrepreneur?
                                                                                                     Make Connections




                                                                                           PROJECT
                                                                                                     25. She will have to sell


                                 THIS IS YOUR
                                                                                                         1,030 kites ($15,450
                                                                                                             $15 = 1,030).
                                                                                                         This goal is realistic
                                                                                                         if Ellen can make
                                                                                                         4 or 5 kites a day


                                 BUSINESS
                                                                                                         (assuming she
                                                                                                         works five days a
                                                                                                         week for 50 weeks
                                                                                                         out of the year).
                                                                                                     26. Answers will vary,
                                                                                                         but should include
       This activity will help you identify a business opportunity that                                  all of the topics
                                                                                                         listed in the
       may be right for you. You will use this business idea for the                                     exercise.
       “This Is Your Business Project” throughout the book.                                          27. Answers will vary.
       1. Divide a sheet of paper into two columns. In the first column                               APPLY
                                                                                                     • Assign Apply What
          list all your interests. In the second column, list business                                 You Learned.
          ideas that relate to each interest.                                                        • Critical Thinking:
                                                                                                       Assign the Think
       2. Make a list of your strengths and weaknesses. Compare                                        Critically questions.
          this list with your list of business opportunities. For which                              • Connections: Assign
                                                                                                       the Make Connections
          business ideas would your strengths most apply? For which                                    activities.
          business ideas would your weaknesses hurt the most?                                        RETEACH
          Based on your strengths and weaknesses, cross out those                                    Review sections of the
                                                                                                     chapter to reinforce the
          business ideas that no longer seem suitable for you.                                       chapter content.
       3. Assess your aptitude, using the checklist in Lesson 1.2. Put                               ENRICH
          a checkmark next to the business opportunities that relate                                 Assign This Is Your
                                                                                                     Business Project.
          to your aptitudes.                                                                         Students will use
       4. For the business opportunities remaining on your list,                                     techniques described
                                                                                                     in the chapter to select
          assess the advantages and disadvantages of each. Cross                                     a business opportunity
          out any whose disadvantages outweigh its advantages.                                       suited to their own
                                                                                                     interests and aptitudes.
       5. Using the library or Internet, find sources of information that                             Once identified, this
          relate to the business opportunities that remain on your list.                             business idea will be
                                                                                                     expanded at the end
          Make a list of these sources. Locate at least one of these                                 of every chapter.
          sources for each business opportunity. For each source,                                    FORMAL
          write a sentence stating the type of information that you can                              ASSESSMENT
                                                                                                     • Assign ExamView®
          obtain from it. On your list, cross out business opportunities                               Chapter 1.
          for which you could not find any information.                                               • Assign Chapter 1 Test
                                                                                                       A or B.
       6. Choose one of the business opportunities remaining on                                      CLOSE
          your list. Answer the six Compare Different Opportunities                                  Ask one or more
          questions based on this business opportunity.                                              students to describe
                                                                                                     some of the choices
       7. Set personal financial goals for a five-year period based on                                 made in completing This
          the business opportunity you chose. Be realistic. Assume                                   Is Your Business
                                                                                                     Project.
          you will need to borrow money to get started. Estimate both                                COOPERATIVE
          your income and expenses to determine the amount of                                        LEARNING
          profit you can expect to make. Next, set nonfinancial goals                                  • The two Apply What
                                                                                                       You Learned activities
          you hope to achieve with this business. Be sure to include                                   are specifically
          specific activities for each goal.                                                            designed as group
                                                                                                       activities. Brainstorm-
                                                                                                       ing is a common tool
                                                                                                       for solving business
                                                                                                       problems.
                                                                                                     • The Make
                                                                                                       Connections
THIS IS YOUR BUSINESS PROJECT                                                                          Communication
1. Answers will vary. 2. Answers will vary. 3. Answers will vary; the aptitude test in the chapter     Activity may also be
should be used. 4. Answers will vary. 5. Answers will vary. 6. Answers will vary, but the six          assigned as a group
                                                                                                       activity.
Compare Different Opportunities questions in Lesson 1.3 should be used. 7. Financial goals
may include making money and paying off debts in two years. Nonfinancial goals may include
helping the community or having personal independence.



                                                                                Chapter Review • Chapter 1                21
CASE STUDY

                                                    SUCCESSFUL DOUGHNUT COMPANY
                                                    NOW MAKES WEDDING CAKES
                                                                                    Krispy Kreme’s modern-day win-



              CASE STUDY
                                            K       rispy Kreme Doughnuts
                                                    was started by Vernon
                                                    Rudolph in 1933 when he
                                            purchased a doughnut shop in
                                                                                    dow service.
                                                                                        Krispy Kreme is famous for its
                                                                                    fresh, glazed, yeast-raised dough-
                                                                                    nuts called “Krispy Kreme Original
              Krispy Kreme Doughnuts        Paducah, Kentucky, receiving the
                                                                                    Glazed.” Other products baked by
              was started by entrepre-      company’s assets, goodwill, and
              neurs who thought out-                                                Krispy Kreme include more than a
              side of the box and were      the rights to a secret yeast-raised
                                                                                    dozen varieties of cake and yeast-
              willing to take financial      doughnut recipe.
              risks. The case empha-                                                raised doughnuts, real fruit pies,
              sizes sacrifices that              Rudolph and his partner moved
                                                                                    cinnamon buns, and several vari-
              entrepreneurs were will-      the Krispy Kreme operations to
              ing to make in order to                                               eties of snack foods.
              run a successful busi-
                                            Nashville, Tennessee, where other
              ness. The major points        members of the Rudolph family
              in this case include          joined the business, opening shops
                                                                                    Doughnut Wedding Cakes?
              entrepreneurial risk,                                                     Krispy Kreme doughnuts are
              products offered, and         in Atlanta, Georgia, and
              product diversification.                                               emerging as a new ingredient for
                                            Charleston, West Virginia.
              Think Critically                                                      wedding cakes and as a souvenir
                                                Krispy Kreme initially began as
              Answers                                                               from the ceremony. Brides and
              1. Rudolph possessed          a delivery business that sold
                 all of the characteris-
                                                                                    grooms are choosing to give
                                            doughnuts to local grocery stores.
                 tics of an entrepre-                                               departing guests two- and four-
                 neur: independence,        In 1937, Rudolph left Nashville to
                                                                                    doughnut gift packs, some carrying
                 self-confidence, deter-     open his own doughnut shop in
                 mination, goal orienta-                                            designer stickers with the bride’s
                 tion, the need to          Winston-Salem, North Carolina. In       and groom’s names on them.
                 achieve and to set         order to start the new business,            InStyle Weddings may have
                 high standards, cre-
                 ativity, and the ability   Rudolph relied on two partners, a       jump-started the trend in its 2001
                 to act quickly.            1936 Pontiac, $200 in cash,             magazine when it listed the fried
              2. Krispy Kreme quickly
                 responded to customer      doughnut-making equipment, the          confections as a way to add a
                 demand for retail ser-     secret recipe, and, most impor-         touch of the unusual to nuptials.
                 vice. It expanded its
                 product line to include    tant, the name Krispy Kreme             Wedding cakes have evolved from
                 more varieties of          Doughnuts. The three partners           a simple tiered stack of doughnuts.
                 cakes, doughnuts, fruit
                 pies, cinnamon buns,       used their last $25 to rent a build-    Some customers opt to buy the
                 and snack foods to         ing across from Salem College           doughnuts and have a local cake
                 satisfy customer           and Academy.
                 needs. It expanded                                                 decorator create something for
                 into new markets, such         Delivering the doughnuts was        them.
                 as weddings and ban-       crucial for success. Rudolph took
                 quets.                                                                 Neighborhood stores and the
              3. By diversifying with       out the back seat of the Pontiac        corporate offices are fielding as
                 the doughnut wedding       and installed a delivery rack. The
                 cakes and souvenirs,                                               many as 40 calls a week as the
                 Krispy Kreme has           first Krispy Kreme doughnuts were        wedding trend grows. A dough-
                 been able to create        made and sold on July 13, 1937, at
                 new demand for its                                                 nut wedding planner helps ease
                 products.                  the Winston-Salem shop. Soon            the fears that go along with
              4. Answers will vary.         people began stopping by the            building a wedding centerpiece
                 Ideas may include
                 doughnuts for meet-        shop wanting to buy hot dough-          from a snack.
                 ings, doughnut packs       nuts. The consumer demand was               Krispy Kreme doughnuts also
                 for school outings, or
                 doughnut-based             so great that Rudolph opened the        have become popular for birth-
                 desserts, such as          shop for retail business by cutting     days and bar mitzvahs as well as
                 strawberry shortcake
                 or ice cream sundaes.      a hole in the shop’s wall to sell the   for banquets, fund-raisers, and
                                            doughnuts—the beginning of              weddings.


             22     Chapter 1 • Should You Become an Entrepreneur?
                                                                                                         EVENT PREP
Franchise Opportunities               benefits for area developers and      ROLE PLAY
                                                                           The Full Service
    The grand opening of a Krispy     the business is the top goal for     Restaurant Management
Kreme store involves long lines of    Krispy Kreme.                        Role Play has the stu-
                                                                           dent owning a popular
people anticipating the delicious,                                         restaurant that serves
addictive warm doughnuts. Strict                                           breakfast, lunch, and din-
and consistent quality control                                             ner throughout the day.
                                                                           Regular customers are
contributes to the huge success of                                         key to the success of the
Krispy Kreme. All Krispy Kreme                                             restaurant. One of the
                                       1. What entrepreneurial char-       best waitresses has a
doughnut mixes are prepared in a          acteristics did Vernon           run-in with regular cus-
modern, state-of-the-art, 135,000-                                         tomers who tried to use a
                                          Rudolph possess?                 coupon that had expired
square-foot manufacturing plant                                            by one week. The stu-
in Winston-Salem and are deliv-        2. List three factors that have     dent must resolve the
                                          contributed to the success       conflict with the customer
ered directly by the company’s                                             and assure the waitress
own fleet of trucks to Krispy              of Krispy Kreme.                 that she is still a key
Kreme stores.                                                              player at the restaurant.
                                       3. How is product diversifica-       1. Answers will vary, but
    The Krispy Kreme market is            tion a key element in the           students should rec-
growing due to area developers                                                ognize the importance
                                          success of Krispy Kreme?            of preserving the
who share the vision, standards,                                              goodwill of regular
and objectives of the successful       4. Invent one additional prod-         customers while main-
                                          uct marketing idea for              taining the loyalty of a
company. Building successful rela-                                            valued employee.
tionships that have long-range            Krispy Kreme doughnuts.          2. Answers will vary.
                                                                              Students may suggest
                                                                              contacting Mr. and
                                                                              Mrs. Fold to offer an

FULL SERVICE RESTAURANT                                                       apology and a gift cer-
                                                                              tificate for a fixed
                                                                              amount or for two free
MANAGEMENT                                                                    meals.
                                                                           3. Answers will vary, but
                                                                              students should rec-
    You own a popular restaurant      10-hour shift and got into a con-       ognize the importance
                                                                              of assuring Sally that
that serves breakfast, lunch, and     frontation with Mr. and Mrs. Fold       she behaved appropri-
dinner throughout the day. Your       over the expired coupon. Now            ately by checking the
restaurant has coupon specials in     Mr. and Mrs. Fold are upset and         expiration date. Sally
                                                                              may need some
the Wednesday and Sunday news-        have indicated that they will take      coaching on how to
papers. Many of your regular cus-     their loyal business to a competi-      deal with this type of
                                                                              situation in the future.
tomers take advantage of these        tor. Sally is very upset about the   4. Answers will vary.
coupons. You have stressed to         situation.                              Students may suggest
                                                                              that coupons contain
your wait staff the importance of                                             no expiration date or
                                      1. How will you handle this situa-
accepting only nonexpired                                                     that coupons be pre-
                                         tion?                                sented at the time the
coupons. Sally, your best waitress,                                           order is placed so that
                                      2. How will you maintain cus-
is careful to look for expiration                                             the expiration date can
                                         tomer loyalty from Mr. and           be checked before the
dates on coupons.
                                         Mrs. Fold?                           customer orders.
    Bill and Penny Fold, regular
                                      3. What will you do to make Sally
customers who eat at your restau-
                                         feel better about the situa-
rant at least twice a week,
                                         tion?
ordered lunch with a coupon.
                                      4. What adjustments can you
They did not realize that the
                                         make to your coupon
coupon had expired the week
                                         promotions to avoid
before. Sally had worked a
                                         future misunderstandings?



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