See 'So you want to be a Entrepreneur?'

      Entrepreneurs provide a specialized human resource; they combine labor, land, and capital to produce goods while incurring risk in their quest for profits. After paying wages, rent, and interest for the use of other resources, entrepreneurs keep any funds left over from their sales revenue. An entrepreneur's profit is a reward for organizing production, bearing risks and uncertainty, or introducing innovations that improve the quality of life.

 

      The most successful entrepreneurs tend to be innovators of new technologies—better production methods, or new products. Advances in communications (e.g., dotcoms) and biogenetics have recently been hot areas. But risk of loss (negative profit) to an entrepreneur can be enormous. Over half of all new ventures fail within two years. Thousands of oil companies went bankrupt when oil prices plummeted in the 1980s and hundreds of firms have lost fortunes trying to develop personal computers and software. On the other hand, Bill Gates established Microsoft (a major software developer) and quickly became the world's youngest self-made billionaire after dropping out of Harvard. Only prospects of profit can overcome fears of loss.