1. The Business Environment Holloway BUA-101/EMCC

2. GOODS and SERVICES GoodsGoods -- Tangible products such as computers, food, clothing, cars and appliances. ServicesServices -- Intangible products (that can’t be held in your hand) like education, healthcare, insurance, recreation and travel. Successfully filling a market need means you could make money for yourself and provide jobs for othersSuccessfully filling a market need means you could make money for yourself and provide jobs for others. Entrepreneurship and Wealth Building 1-2

3. BUSINESS and ENTREPRENEURSHIP Entrepreneurship and Wealth Building BusinessBusiness -- Any activity that seeks to provide goods and services to others while operating at a profit. EntrepreneurEntrepreneur -- A person who risks time and money to start and manage a business. Success in business is often based on the strategy of finding a need and filling it.Success in business is often based on the strategy of finding a need and filling it. 1-3

4. REVENUE, PROFIT AND LOSS Revenues, Profits and Losses RevenueRevenue -- The total amount of money a business takes in during a given period by selling goods and services. ProfitProfit -- The amount of money a business earns above and beyond what it spends for salaries and other expenses. LossLoss -- Occurs when a business’s expenses are more than its revenues. 1-4

5. RISK Matching Risk with Profit RiskRisk -- The chance an entrepreneur takes of losing time and money on a business that may not prove profitable. Not all businesses make the same amount of profit.Not all businesses make the same amount of profit. Businesses take risks, but with great risks could come great profit.Businesses take risks, but with great risks could come great profit. 1-5

7. HOW is TAX MONEY USED? Businesses Add to the Standard of Living and Quality of Life Taxes are used to provide: Hospitals Schools Libraries Playgrounds Roads Fire Protection Police Protection Environmental Programs Support for People in Need 1-7 What the heck are taxes for? Taxes Taxes: Are they Good or Bad???

8. STAKEHOLDERS Responding to the Various Business Stakeholders StakeholdersStakeholders -- All the people who stand to gain or lose by the policies and activities of a business and whose concerns the businesses need to address. Who are Stakeholders?Who are Stakeholders?  Customers  Employees  Stockholders  Suppliers  Dealers  Community Members  Media  Elected Officials  Bankers  Environmentalists 1-8

10. THE UPS and DOWNS of ENTREPRENEURSHIP Entrepreneurship Versus Working for Others The UPS The freedom to succeed. Make your own decisions. High possibility of wealth. Hire your own staff. The DOWNS The freedom to fail. No paid vacations. No health insurance. No daycare. 1-10

11. WHO TAKES the ENTREPRENEURIAL CHALLENGE? Opportunities for Entrepreneurs Millions of people have started businesses and succeeded.Millions of people have started businesses and succeeded. The number of Hispanic- owned businesses in the U.S. has grown dramatically.The number of Hispanic- owned businesses in the U.S. has grown dramatically. Women now own one-third of all businesses.Women now own one-third of all businesses. 1-11

12. FIVE FACTORS of PRODUCTION The Importance of Entrepreneurs to the Creation of Wealth 1. Land 2. Labor 3. Capital 4. Entrepreneurship 5. Knowledge Entrepreneurs use what they’ve learned to grow their businesses and increase wealthEntrepreneurs use what they’ve learned to grow their businesses and increase wealth. 1-12

13. WHAT is the BUSINESS ENVIRONMENT? The Business Environment 1-13

14. Global Environment Economic and Legal Environment Technological Environment Competitive Environment Social Environment Pg. 12-19

15. GOVERNMENT’S ROLE in BUSINESS The Business Environment Government can promote business by… 1. Minimizing spending and keeping taxes and regulations to a minimum. 2. Allowing private ownership of businesses. 3. Minimizing interference with the free exchange of goods and services. 4. Passing laws that enable businesspeople to write enforceable contracts. 5. Establishing a currency that’s tradable in world markets. 6. Minimizing corruption. 1-15

16. IMPORTANT CHANGES to the GLOBAL ENVIRONMENT The Global Environment 1. Growth of global competition. 2. Increase of free trade among nations. 3. Development of efficient distribution systems. 4. Advances in communication systems. 1-16

17. INCREASING COSTS of the GLOBAL ENVIRONMENT The Global Environment Wars, like those in Iraq and Afghanistan, cost billions of dollars. Tax money is diverted. Cost of security goes up. Cost of insurance goes up. LG7 1-17

18. Critical Thinking Let’s start a restaurant here in Bangor… o Who are our stakeholders? o How can we benefit our community (aside from just providing jobs and tax revenue)? o Who are your suppliers? How will you create good relationships with them? o Is there any conflict between our desire to be as profitable as possible and our desire to pay employees a livable wage? o Which environmental factors may have the biggest impact on our business? How? Why?

19. Choose a Business… any business! Walk in like you own the place… and look around. Answer the questions as they regard that business. Take a few notes and bring’em to our next meeting.