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Entrepreneurship means setting up a business to make a profit. A business, as we saw in Chapter 1 вЂњThe Foundations of BusinessвЂќ, combines resources to produce goods or services. 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. If we look a little more closely at the definition of entrepreneurship, we can identify three characteristics of entrepreneurial activity (Dollinger, 2003): Risk taking is the missing component that weвЂ™re looking for in a definition of entrepreneurship, and so weвЂ™ll define an entrepreneur as someone who identifies a business opportunity and assumes the risk of creating and running a business to take advantage of it. But taking advantage of that idea-choosing to start a new business and to commit themselves to running it-was a risk.

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Therefore, the idea of replacing a sack of flour with a computer-controlled simulator wasnвЂ™t necessarily rocket science for the couple. Mary, who has not only a head for business but also a degree in industrial engineering, has worked at the Johnson Space Center. Rick, as weвЂ™ve seen, was an aerospace engineer, and his rГ©sumГ© includes work on space-shuttle missions at NASA.

вЂњWe were always about one month away from bankruptcy,вЂќ recalls Mary.ДЄt the same time, itвЂ™s not as if the Jurmains started up BTIO simply because they had no вЂњconventionalвЂќ options for improving their financial prospects. He had to make the first forty simulators himself, and at the end of the first summer, BTIO had received about four hundred orders-a promising start, perhaps, but, at $250 per baby (less expenses), not exactly a windfall. Rick recalls that the idea for a method of creating BTIO came to him while вЂњI was awake in bed, worrying about being unemployed.вЂќ He was struggling to find a way to feed his family. While they were watching the show about teenagers and flour sacks, they were living off a loan from her father and the returns from a timely investment in coffee futures. We hasten to point out that, in 1993, the Jurmains were both unemployed-Rick had been laid off by General Dynamics Corp., and Mary by the San Diego Gas and Electric Company. To appreciate fully what it is, letвЂ™s go back to the story of the Jurmains, for whom entrepreneurship seems to have worked out quite well. But an important component of a satisfactory definition is still missing. Another definition identifies an entrepreneur as someone who uses вЂњresources to implement innovative ideas for new, thoughtfully planned ventures,вЂќ (Canadian Foundation for Economic Education, 2008) which is also true as far as it goes. So what, exactly, is an entrepreneur? What does an entrepreneur do? According to one definition, an entrepreneur is an вЂњindividual who starts a new business,вЂќ and thatвЂ™s true as far as it goes. In fact, Mary was nominated three times for the Ernst & Young Entrepreneur of the Year Award and named 2001 Wisconsin Entrepreneurial Woman of the Year by the National Association of Women Business Owners. In developing BTIO and Realityworks Inc., the Jurmains were doing what entrepreneurs do (and doing it very well).

Explain the differences among three types of start-up firms.

Identify five potential advantages to starting your own business.

Describe the three characteristics of entrepreneurial activity.

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