Lesson 6: Nothing Can Be Excellent without Risk of Failure

“Fortune favors the bold”--Cornelius Sulla, Roman Dictator

Shipping was a high-risk business in colonial times. Just getting from Boston (shown above in 1730) to London could be full of danger. A successful journey across the Atlantic Ocean could make a shipowner a fortune while a ship lost at sea could bring a financial disaster.

Mike Zuckerberg created Facebook. Bill Gates revolutionized the ways computers operate. Thomas Edison invented THOUSANDS of items (like the light bulb) we take for granted today. What do these people all have in common? They are all entrepreneurs. An entrepreneur is a person that organizes a business idea and takes on the risk that the idea might fail. If all goes well then the entrepreneur is a success. If not, well, as any entrepreneur will tell you, failure is how you learn to be successful. Most people are unaware that the colonies that were founded here in what is now referred to as the United States were largely the result of people taking a risk that a colony in the wilderness would be successful. These entrepreneurs organized the money, people, and other resources necessary to send a group of city folks to the wilderness of the New World. These entrepreneurs also took the risk that the colony would fail and they and the people they convinced to invest their money in the colony would lose everything. Success is never truly easy. It does not just happen, so to attempt to be successful you must be bold! In this lesson, you will learn about profit, incentive, revenue, cost, and, of course entrepreneurs in both colonial and modern times.

Standard: 6

Profit provides an incentive for individuals and businesses; different business organizations and market structures have an effect on the profit, price and production of goods and services.

Benchmark: 5.2.4.6.1

Describe the concept of profit as the motivation for entrepreneurs; calculate profit as the difference between revenue (from selling goods and services) and cost (payments for resources used).

Essential Question:

How is the concept of profit a motivation for entrepreneurs? How do I calculate profit as the difference between revenue (from selling goods and services) and cost (payments for resources used)?