missions at NASA. Mary, who has not only a head for business but also a degree in industrial engineering, has worked at the Johnson Space Center. Therefore, the idea of replacing a sack of flour with a computer-controlled simulator wasn’t necessarily
rocket science for the couple. But taking advantage of that idea—choosing to start a new business and to commit themselves to running it—was a risk. Risk takingis the missing component that we’re looking for in a definition of entrepreneurship, and so we’ll define an entrepreneur as someone who identifies a business opportunity and assumes the risk of creating and running a businessto take advantage of it.The Nature of EntrepreneurshipIf we look a little more closely at the definition of entrepreneurship, we can identify three characteristics of entrepreneurial activity: 1. Innovation . Entrepreneurship generally means offering a new product, applying a new technique or technology, opening a new market, or developing a new form of organization for the purpose of producing or enhancing a product. 2. Running a business . A business , as we saw in Chapter 1, The Foundations of Business , combines resources to produce goods or services. Entrepreneurship means setting up a business to make a profit. 3. Risk taking . The term risk means that the outcome of the entrepreneurial venture can’t be known. Entrepreneurs, therefore, are always working under a certain degree of uncertainty , and they can’t know the outcomes of many of the decisions that they have to make. Consequently, many of the steps they take are motivated mainly by their confidence in the innovation and in their understanding of the business environment in which they’re operating. It isn’t hard to recognize all three of these characteristics in the entrepreneurial experience of the Jurmains. They certainly had an innovative idea. But was it a good business idea? In a practical sense, a “good” business idea has to become something more than just an idea. If, like the Jurmains, you’re interested in generating income from your idea, you’ll probably need to turn it into a product —something that you can market because it satisfies a need. If—again, like the Jurmains—you want to develop a product, you’ll need some kind of organization to coordinate the resources necessary to make it a reality (in other words, a business ). Risk enters the equation when, like the Jurmains, you make the decision to start up a business and when you commit yourself to managing it.
A Few Things to Know about Going into Business for Yourself Figure 5.1. Do you think Chris DeWolfe knew what a huge success MySpace would be when he and Tom Anderson started their Web site? So what about you? Do you ever wonder what it would be like to start your own business? Maybe you want to try your hand at entrepreneurship. You could be the
next Tom Anderson or Chris DeWolfe, founders of MySpace. Or the next David Marcks, a golf course manager who came up with the idea of Geese Police—training dogs to chase geese from golf courses, corporate parks, and municipal playgrounds.
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- Business, Entrepreneurship, U.S. Small Business Administration