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Jesus Ruelas
Baker/Gillespie
Political Studies
6 March 2015
Be your own Boss
There are 28 million small businesses in the U.S. -- which outnumber corporations 1162
to 1 (Bhasin, Aimee Groth and Kim). This means that around 28 million successful
entrepreneurs are being their own boss. But 50% of small businesses fail in the first five years.
Some businesses fail in the first few years due to poor management and not being in touch with
customers (Five Reasons 8 Out Of 10 Businesses Fail). This article will help you be a
successful business owner. In order to be a successful entrepreneur one must understand their
consumers, know how to make a profit, and lastly one needs to have a certain characteristic that
sets them apart from the rest.
The first step in starting a successful business entrepreneurs need to understand their
consumers. When deciding what type of business entrepreneurs want to start they need to figure
out who their target demographic will be. A demographic is a customers gender, age and ethnic
race. Examples of a demographic is a male college student around 25 years old. When a
demographic has been chosen one must look at their psychographics. Psychographics is about
using the demographic information possessed for an entrepreneurs customer personalities to
figure out more about their lifestyle, their behaviors and their habits (What are
psychographics?). Knowing customers and what they enjoy is crucial to business success.
To have a successful business an entrepreneur have to be able to make a profit. One
need to be able to sell products at an affordable price so that customers will buy them but still be

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able to make a profit to have a successful sale. This is is called a price equilibrium, to
understand a price equilibrium one must know about supply and demand. An important concept
that will determine if a business thrives or dies is called supply and demand. Supply and demand
is exactly what it sounds like, being able to find out how many customers want a product (the
demand) then ordering the supply to fulfill the demand. The law of demand states, Consumers
buy more of a good when its price decreases and less when its price increases.(The law of
demand) Show in the supply and demand chart, the demand decreases as the price increases and
the demand increases the price decreases. People enjoy products at good prices and a good price
needs to be determined. The law of supply states, An increase in price results in an increase in
quantity supplied (Intro to supply). As seen in the supply and demand chart the supply
increases when the price increase. And the supply decrease when the price decreases. Supply and
demand go hand in hand. Every product has a price equilibrium, a price equilibrium is when the
supply and demand are equal. If a product's demand is greater than the supply it causes a
shortage as seen in the supply and demand chart. If a products supply is greater than the demand
it causes a surplus also seen in the supply and demand chart. There needs to be a perfect balance
between supply and demand. Another cost a business owner should account for is cost of
production. Cost of production is costs that are necessary for your business. These costs affect a
business by taking away from their total profit made. Production costs include fixed costs and
variable costs. Fixed costs are expenses that don't really change over time and payments that
need to be paid. No matter how much a business sells they have to still have to pay their fixed
costs. An example of fixed costs are rent, payroll, or equipment needed. Another cost that needs
to be accounted for are variable costs. Variable costs are costs that change. They change based on

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how much a business sales. Theses are critical to understand when starting a business. These
determines if the business thrives or dies.
Know the business and what customers want are very important but starting a business is
hard. An entrepreneur who seeks to own their own business needs to have determination. When
deciding to start their own business they are many obstacles that one must overcome. Bill Gates
is a perfect example of a successful entrepreneur that had determination. Gates is the co-founder
and chairman of Microsoft Corporation. Microsoft started in Bill Gates parents house in 1975 to
a company worth $290 billion. When Bill Gates established Microsoft with his friend Paul Allen
they were two kids in high school with an interest in computers. Their first success was with the
start of Traf-o-data, a small computer
they built that measured traffic flow. The
same year Bill Gates and Paul Allen had
wrote the first computer language for
personal computers. Shortly later Bill
Gates signed a deal with IBM (who
owned the pc business at the time) so
that every IBM home computer will
have Microsoft software inside. Shortly
after Microsoft was successful in the
fact that they did not shut down yet. But Bill Gates was determined to grow his company to
overtake the PC (Personal Computer) industry, and be the new industry standard. But Bill Gates
ran into a challenge in 1983 when he payed a visit to a computer company called VisiCorp.
VisiCorp had created a mouse driven graphical user interface(GUI) that challenged Microsofts

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operating systems. Bill Gates knew that a graphical user interface(GUI) was the way of the
future. So he decided to take the idea of VisiCorp GUI and release the next generation operating
system called Windows. But shortly after VisiCorp sued Microsoft for taking their GUI and
selling it without permission from Visicorp (Petechuk). Bill Gates started a multibillion dollar
company in his parents garage. Bill Gates was determined to set the industry standard of personal
computers, and he did using many different methods. But his determination is what made him
successful. No matter what the odds are determination can make anyone successful.
Being an entrepreneur is difficult. But being able to understand customers, and using that
to make a profit, and having determination will help you succeed. It will be worth it in the end.
You may not strike riches like Bill Gates. But you do feel a fulfillment when you can be your
own boss and make your own rules. Take the risk, and with enough determination reap the
rewards.

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Works cited
Bhasin, Aimee Groth and Kim. "18 Amazing Facts About Small Businesses In America."
Business Insider. Business Insider, Inc, 24 Aug. 2011. Web. 02 Mar. 2015.
"E.5.1 Define Aggregate Supply and Demand, Gross Domestic Product (GDP), Economic
Growth, Unemployment, and Inflation." Resourcesforhistoryteachers -. N.p., n.d. Web.
05 Mar. 2015.
"Five Reasons 8 Out Of 10 Businesses Fail." Forbes. Forbes Magazine, 9 Dec. 2013. Web. 25
Feb. 2015.
Gillespie, Emily. "Intro to Supply." Political Studies. Sacramento New Technology High School:
Sacramento, CA. 28 January 2015. Lecture.
Gillespie, Emily. "The law of demand." Political Studies. Sacramento New Technology High
School: Sacramento, CA. 28 January 2015. Lecture.
Petechuk, David. "Gates, Bill 1955." Encyclopedia.com. HighBeam Research, 01 Jan. 2005.
Web. 02 Mar. 2015.
"What Are Psychographics? [FAQs]." What Are Psychographics? [FAQs]. Maggie Hibma, 28
Oct. 2013. Web. 04 Mar. 2015.