Chapter 1 Entrepreneurship and Wealth Building Goods tangible products Business any activity that seeks to provide goods and services to others Services intangible products Entrepreneur is a person who risks time and money to start and manage a while operating at a profit business Revenue is the total amount of money a business takes in during a given period by selling goods and services Profit is the amount of money a business earns above and beyond what it spends for salaries and other expenses needed to run the operation Loss occurs when a business expenses are more than its revenues Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove profitable Wal mart largest private employer Businesses their employees pay taxes that contribute to the standard of living and quality of life for everyone Standard of living refers to the amount of goods and services people can buy with the money they have Quality of life refers to the general well being of a society in terms of its political freedom natural environment education healthcare safety amount of leisure and rewards that add to the satisfaction and joy that other goods and services provide Stakeholders are all the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address customers employees stockholders suppliers dealers ect Outsourcing means contracting with other companies often in other countries to do some or all the functions of a firm Insourcing when foreign companies set up design and production facilities in the USA Nonprofit organization is an organization whose goals do not include making a personal profit for its owners or organizers they do strive for financial gain but use them for social educational goals and not personal profit Social entrepreneurs are people who use business principle to start and manage not for profits and help address social issues Entrepreneurship Versus Working for Others Succeed in business by rising through the ranks of large companies or be an entrepreneur Women own over 1 3 of all businesses Factors of production that contribute to wealth o 1 Land natural resources o 2 Labor o 3 Capital o 4 Entrepreneurship o 5 Knowledge o Entrepreneurship knowledge combined make rich countries rich Business environment consists of the surrounding factors that either help today The Business Environment or hinder the development of businesses 5 elements of business environment o 1 Economic legal environment o 2 Technological environment o 3 Competitive environment o 4 Social environment o 5 Global business environment Economic and Legal environment The Technological Environment o People are willing to start new businesses if they believe the risk of losing their money isn t too great o Minimize spending and keep taxes regulations to a minimum favor o When gov allows private ownership of businesses promotes businesses entrepreneurship o If the gov pass laws that enable businesspeople to write enforceable contracts lessen the risks of entrepreneurship o Gov should establish a currency that s tradable in world markets o Gov should minimize corruption o Capitalist system relies on honesty integrity and high ethical standards failure to abide weakens the whole system o Technology means everything from phones and copiers to computers medical imaging devise personal digital assistants and the various software programs that male business processes more effective produce the desired result efficient produce the result using least amount of resources and productive o Productivity is the amount of output you generate given the amount of input such as the number of hours you work o E commerce is the buying and selling of goods over the internet Business to consumer B2C Business to business B2B o Database electronic storage file for info o Identity theft is the obtaining of individuals personal info for illegal purposes The Competitive Environment o Need to have high quality products and a good value and great service to be competitive o Empowerment giving responsibility freedom training and equipment to works so they can respond quickly to customers The Social Environment o Demography is the statistical study of the human population with regard to its size density and other characteristics such as age race gender and income o Manage diversity o Social security issue o Single parent families have effected business The Global Environment nations o Growth of global competition and the increase of free trade among o Globalization has grown thanks to communication and development of efficient distribute systems o Globalization has improved living standards o Some companies benefit from war bullet makers while others don t bc their workers leave for war Threat of war causes gov to spend money o Climate change is the movement of the temp of the planet up or down over time Greening saving energy and producing products that cause less harm to the environment The Evolution of US Business Increased productivity and efficiency means we need less ppl for jobs but it also creates new jobs elsewhere Today the fastest growing firms provide services in areas like law health telecommunications entertainment and finance
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