Chapter 1 Success is based on finding a need and fulfilling it thus helping your community EX providing goods jobs and services o Goods tangible products o Services intangible products o Business any activity that seeks to provide goods and services to others while operating at a profit the amount of money a business earns above and beyond what is spends for salaries and other expenses Revenue is the total amount of money a business takes in during a period of time through goods and services Loss is when a business s expenses are more than its revenues o Entrepreneur a person who risks time and money to start and manage a business In order for an entrepreneur to open a business he or she may go to backs or venture capital firms to borrow money o Risk is the chance an entrepreneur takes of losing time and money on a business that may not be profitable Risk relates to profit in that your risk investing money in something and when you pay your dues and salaries to other employees you end up with no profit Enterprises that take the most risk make the most profit Example selling cell phones in some of the poorest cities in the country o A business like Wal Mart makes the owner wealthy and also provides jobs and money for employees who in turn help the community by paying taxes o Standard of living amount of goods and services people can buy with the money they have The US has the highest although workers in Germany and Japan make more money This is because prices in Germany and Japan are higher than in the US so a person here can buy more bang for buck Goods are often more expensive in countries due to higher taxes and stricter government regulations o Quality of life general well being of a society in terms of its political freedom natural environment education health care and leisure Results from a balance of business nonprofit and government o Stakeholders all people who stand to gain or lose by the policies and activities of a business whose concerns the business needs to address Customers employees stockholders media environments agencies community Need to recognize and respond to needs of stakeholders o Ex ability of a company to make profit needs to be able to balance paying employees and protecting the environment eco friendly o Outsourcing contracting with other companies to do some functions within the firm Ex UPS mail man accountant Dell in India o Insourcing foreign companies setting up facilities in the US Ex Hyundai Korean based Nonprofit organizations like schools charities and social groups also contribute to the welfare of society o Nonprofit organizations goals DO NOT include making a profit for themselves Entrepreneur vs Company o Company paid vacations health insurance o Entrepreneur higher risk and you have to provide benefits for yourself Factors of production that contribute to wealth o Land natural resources o Labor workers o Capital machines tools etc o Entrepreneurship o Knowledge Per capita domestic growth GDP is the value of all goods and services provided by a country divided by the population Business environment are factors that either help or hinder business development o Economic and legal environment People will start business if they believe there is little risk in Government can change taxes which can help or hinder losing money business Gov can also promote entrepreneurship by allowing private ownership of business Gov can establish tradable currency in foreign countries Minimize corruptoin o Technological o Competitive o Social o Global business prosper Can t control these environments but must monitor in order to
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