Transcript 5 Entre and the Economy

Entrepreneurship & The Economy
Economics
 In a free enterprise system (a.k.a capitalism)
people can make economic choices such as
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What to buy
To own property
To start a business and compete with others
Without capitalism, entrepreneurship cannot exist!
Economics Continued
 Market structure: the nature and degree of
competition among businesses operating in the
same industry
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Perfect competition: numerous buyers & sellers – no
single buyer/seller can affect price – g/s is virtually
identical
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Monopoly: one seller has control over supply & prices
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(e.g. food companies)
(e.g. LCBO, Microsoft)
Canadian Air Farce commentary on Microsoft
Oligopoly: a few competing firms exist
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(e.g. car industry, gas companies)
Basic Economic Concepts
 Goods: tangible/physical items
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Example?
 Services: intangible/non-physical products
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Example?
Interdependence
Demand
 Demand: the quantity of goods or services
that consumers are willing and able to buy
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Law of demand: as price goes up, the quantity
demanded goes down
Give an example of this law using a specific
product.
Demand Continued
 Elastic demand: a slight change in price
creates a sharp change in demand (highly
responsive to change)
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Example: Vacation package
 Inelastic demand: a change in price has
very little effect on demand
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Example: Food, fuel
Supply
 Supply: the amount of a good or service
that producers are willing to provide
 If demand exceeds supply, scarcity occurs
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Examples?
Economic Indicators
 The federal government publishes statistics
to help entrepreneurs understand the state of
the economy and predict changes
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Employment rate – July 2012 92.7%
GDP – the total market values of G&S
produced within a nation during a given
period
What Entrepreneurs Contribute
 They recognize consumer wants and turn
demand into supply
 They respond to consumer wants and create
even more wants to be satisfied – drives the
economy
 They provide jobs, thus securing their own
financial security and those they employ
Small Business Vs. Ventures
 Small business: “mom-and-pop” - main goal
is to create a job that provides enough
profit to fulfill personal goals
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Example: shoe repair shop, lawyer
 Ventures: principal goal is to innovate and
grow the venture to a regional, national, or
global level
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Example: Tim Hortons, LuLu Lemon
Challenges Facing Young
Entrepreneurs
 Lack of experience & knowledge they bring
to a venture
 No credit history
 No collateral
 No track record in paying off debt
Value of Experience
 Entrepreneurial skills can be developed
through:
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Part-time work
Summer work
Volunteering
School leadership positions