4 Entrepreneurs and Business Ownership

4 Entrepreneurs and Business Ownership - 4 Entrepreneurs...

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4 Entrepreneurs and Business Ownership business plan will literally spell out the operational details, assumptions, and predictions for a (new) business. A well-crafted business plan will also help the entrepreneur in systematically organizing for success, but the most significant function of many business plans is to influence those with money to share some with the entrepreneur - to help convert a dream into reality debt financing occurs when an entrepreneur finds someone or some entity (creditor) to obtain business start-up funds from - in exchange for having lent the money, the creditor will expect (over an agreed-upon time period) to be repaid the original amount borrowed (the principal) plus interest, at an agreed- upon rate entrepreneur someone who risks resources such as time and money to start and operate a business equity financing compared to debt financing, equity financing entails no repayment, but it does require the entrepreneur to sell at least a partial interest in the new business. This essentially means the equity investor becomes a co-owner of the business trade or vendor credit occurs when vendors allow entrepreneurs to purchase supplies and equipment directly and spread the payments over several months or years 4.1 This module is intended to help you better understand important stuff that entrepreneurs , people who risk resources like their time and money to start and operate a business, learn through experience . Experience has sometimes been described as that wonderful teacher that gives you the exam before the lesson! The intent here is to circumvent pain and skip to the learning (to the degree that can be done). While the essential information we’ll be exploring applies to hospitality businesses and examples will be drawn from them, these fundamentals will be relevant to most any type of business. And here’s yet another example of content being valuable from a variety of perspectives: obviously if you’ve dreamed of or are intent upon starting/owning your own business, the ideas/lessons that follow will, sooner and later, be useful. But even if you don’t want to start/own your own business, it’s still probable that you’ll work or otherwise be some sort of stakeholder in someone else’s business. So if you take what’s here to heart (and mind), you’ll better understand what the owner(s) go through. Not only will you be able to pass and even score well on any quizzes or tests you may take covering this subject matter, it will be more evident how you can contribute to solving problems for those who actually own the entities you’ll work for/invest in/frequent as a customer. This can keep you happier, healthier, and may even help you become wealthier!
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In business, as in other competitive activities such as sports or games, there are no guarantees of success, wealth, or fame. There are too many uncontrollable variables to remove all of the risks involved, but that’s part of the appeal – it’s never really certain who’s gonna win or lose, –and even
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This note was uploaded on 11/11/2011 for the course HB 100 taught by Professor Donhue during the Spring '08 term at Michigan State University.

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4 Entrepreneurs and Business Ownership - 4 Entrepreneurs...

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