Free Enterprise Own Your Own Business We live in a Free Enterprise economy meaning if you have a good idea for a business and money to start it you can own your own business. But if you want the business to succeed using and understanding good business practices will help it succeed.

The Good & Bad What might be the benefits of owning your own business? What might be the negatives to owning your own business? Have the kids come up with ideas. Things we’ve discussed in the past: Good = You’re the boss, you can set your time (unless you open a business in a mall that has certain hours of operation), you get the money made, you can have people work for you so you don’t have to do as much of the work, you sell usually what you choose and like. Negatives of owning a business include: If someone doesn’t show up you have to cover for them, if the business fails you lose money, if something goes wrong you are in charge, etc.

Business The sole owner, partnership, or corporation that creates and sells a product or service. You can open up your own business at a store location like in a mall, on the internet, part of a bigger corporation such as tupperware, pampered chef, marykay, etc.

Product Something produced by humans or machines or natural process. Lemonade Athletic Shoes Maple Syrup If you don’t have enough it’s tough to make money. If you make or buy too much to sell you are stuck with the leftovers. For example when the superbowl or world series is played they make t-shirts, sweatshirts, etc. for both teams as the champions so it is on hand when the game is over. The loser team sweatshirts, t-shirts, etc. are often donated to other countries.

Service Work done by others for others. Haircut Auto Repair Often there is very little overhead or things you have to purchase and have on hand when doing a service.

Revenue Money a company receives from selling a product or service. Be careful not spend this all at once, often people think this is free money, but really this money is used to pay for more supplies, utility bills for your business, paying your employeese, etc.

Expense A cost associated with operating a business. With the revenue you have to pay for things like what? Electricity, rent, employee wages, etc.

Profit Money gained after expenses have been paid. After you’ve paid all the bills for you company if you have money left over that is your profit.

Salary Money paid to someone for the work they do. Sometimes you pay your employees really well to make them perform better. There are incentives like the more cars you sell, the more money you make.

Loss Expenses exceed the revenues. This of course is what you don’t want your company to experience, but often times you have losses when starting up a company until it gets going and you pay off equipment, etc. **Teachers: If you have ever owned or were part of a company like tupperware, pampered chef, etc. you can use your own experience to share your profit or loss.

Profit Equation Revenue – Expenses = Profit or Loss

What is an entrepreneur? An entrepreneur is a person who organizes and manages a business, assuming the risk for the sake of profit. An entrepreneur sees an opportunity, makes a plan, starts the business, manages the business and hopefully receives the profits. If you are a person who likes to take risks being an entrepreneur may be for you. Some people want job security (like a teacher, doctor, etc.)/

Entrepreneurial Cycle Manufacturing Sales Design Marketing Usually when someone wants to open a business the “Design” part of the cycle comes to mind. Each part of the cycle however is very important and continually changes over time to make your product better. For example if you open a cookie business you may find you need bigger machines to make bigger batches because you are selling so much. You may have a drop in business so to help with marketing you may make a coupon like buy one get one free to help attract business. This is part of the manufacturing part of the cyle. You should look at your sales and see how your product is doing, are you selling more or less than before? How can you increase sales to make a bigger profit? Then you go back to the design and modify it and the cycle continues.

Advertising The activity of attracting public attention to a product or business. What are some good advertisements you’ve seen? Often a business will spend more on this, especially in the beginning, than they spend on other things.

Marketing The activities involved in promoting a company, product or service. These might include billboards, radio or tv commercials, coupons, tell a friend and earn _____.

What Makes A Good Company? Make quality products or services. Provide a healthy working environment. Treat employees well. Benefit community. Support community efforts (schools, parks, etc.) Demonstrate good business ethics (honesty, rules, standards, etc.) Many big businesses show how much they donate to schools, sports, etc.