Glencoe Accounting and Mrs. Nichols

Key Terms  Free enterprise  Profit  Loss  Entrepreneur  Capital  Types of business  Service  Merchandising  Manufacturing  Types of Businesses  Sole proprietorship  Partnership  LLC  Corporation  S. Corp

Big business logos! Can you think of some local businesses? Business

Free Enterprise  We are free to produce goods and services.  We can use our money as we see fit  Spend it  Save it  Donate it  Competition is key!

Free Enterprise PROFIT Money earned over and above the amount spent to keep the business operatingLOSS Businesses that spend more money than they earn

Entrepreneur ProsCons  Be your own boss  You create opportunities to earn money  Decide your own schedule and the hours you work  Choose the people you work with and for  You benefit from your hard work.  Will work long hours  Lose security of steady wages and medical benefits  Market your own products and services  Be motivated and energetic majority of the time  Risk losing money

Are you an Entrepreneur?  Speaking  Writing  Marketing  Creative  Mechanical  Risk taker  Accounting knowledge  Self motivated  Self starter  Have a vision  Great energy  Imagination  Computer skills Consider owning your own business … Some skills you may need are

Types of Business Operations  Capital – money that investors, banks or business owners supply.  Service Business – provides a needed service for a fee.  Merchandising Business – buys finished products and resells them.  Manufacturing Business – buys raw materials, uses labor and machinery to transform them into finish products.

Forms of Businesses Sole proprietorship  Easy to set up  All profits go to owner  Owner has total control  Few regulations to follow Hard to raise money, owner has all the risks. Limited expertise and hard to attract talented employees.

Forms of Businesses Partnership  Easy start up  Pooled skills and talents  More money available Risk of partner conflict, shared profits, shared risks

Forms of Businesses Corporation  Easier to raise money  Easy to expand  Easy to transfer ownership  Losses limited to investment More costs to start, more complex to organize, more regulations, higher taxes

Are you an Entrepreneur  Persistent  Creative  Responsible  Inquisitive  Goal-oriented  Independent  Demanding  Self-confidence  Risk-taking  Restless Rate yourself 5 to 1 5 being most like you, and 1 being least like you.