Profit is an important incentive that leads entrepreneurs to accept the risks of business failure. Tell students that they are going to learn about a famous Kentucky entrepreneur named John Schnatter. Ask if anyone knows who he is. Explain that an entrepreneur is a risk-taking human resource who organizes other productive resources to produce goods and services for profit. Finally, tell students that competition-the struggle among sellers to provide goods and services to consumers at the lowest possible prices faced by everyone who goes into business.
Many businesses are successful because of specialization.
This means the business focuses on fewer products so that they can make the remaining ones better and more efficiently. Specialization also leads to interdependence-the mutual dependence on others that is required in order to get the job done. In Papa John's case, the business is dependent on farmers who supply the ingredients, trucks that get the ingredients to market, and so on. Finally, all entrepreneurs face the problem of opportunity cost-the most valuable alternative given up when one choice is made rather than another. John Schnatter is a successful pizza entrepreneur, but he doesn't have the time to open another type of business.