1. Business Environment and the entrepreneur

2. Purpose To learn about the different types of businesses
and how they are organized.

3. Differing purposes For profit: Operates to earn money for their
owners or shareholders
Not for profit: Operates for the greater good
and does not operate for a profit
Write three examples of both

4. Business Environment
Free enterprise system: People are free to produce
the goods and services they chose.
Business owners must attract customers
Two things needed to survive
Profit: Money earned over what was spent (the opposite
is loss)
Must attract and keep individuals willing to take the
risk run the business

5. Entrepreneurship Entrepreneurs: Transforms ideas for products and
services into real-world businesses
Pros
Cons
You own your own business
You create opportunities for earning money
You control and create your work schedule
You serve the people you serve
You select the people who you work with
You benefit from the rewards of your own hard work
You choose your own work hours.
You probably need to work long hours
You lose the security of steady wages and medical benefits and employer provides
You market your own services or products
You pay your own operating expenses
You must be motivated and energetic each day
You face the possibility of losing your money

6. Traits of the Entrepreneur
Tenacity: The never say quit attitude
Passion: It's commonly assumed that successful
entrepreneurs are driven by money. But most will tell
you they are fueled by a passion for their product or
service, by the opportunity to solve a problem and
make life easier, better, cheaper.
Tolerance of ambiguity: This classic trait is the definition
of risk-taking--the ability to withstand the fear of
uncertainty and potential failure.

7. Traits of the Entrepreneur
Vision: One of the defining traits of entrepreneurship
is the ability to spot an opportunity and imagine
something where others haven't.
Self-belief: Self-confidence is a key entrepreneurial trait.
You have to be sure your product is something the world
needs and that you can deliver it to overcome the
naysayers, who will always deride what the majority has
yet to validate.

8. Traits of the Entrepreneur
Flexibility: Business survival, like that of the species,
depends on adaptation.
Rule-breaking: Entrepreneurs exist to defy
conventional wisdom. In fact only 13% of all businesses
are successful.

9. The Entrepreneurial Process
Aware of their environment
Evaluate alternatives
Seek best solutions
Turn ideas into action

10. Types of Business Operations
Service Business: provides needed services for a fee
Merchandising Businesses: Buys finished products and
resells them to individuals or other businesses
Manufacturing Businesses: Buys raw materials, such as
wood or iron ore and transforms them into finished
products through the use of labor and capital.

11. Types of Business Operations
Service Business: provides needed services for a fee
Merchandising Businesses: Buys finished products and
resells them to individuals or other businesses
Manufacturing Businesses: Buys raw materials, such as
wood or iron ore and transforms them into finished
products through the use of labor and capital.

12. Forms of Business Organizations
Sole Proprietorship: One owner business
Advantages
Disadvantages
Easy to set up
All profits go to the owner
Owner has total control
Few regulations to follow
Limited expertise
Hard to raise money
Owner has all of the risk
Hard to attract talented employees

13. Forms of Business Organizations
Partnership: A business owned by two or more people,
called partners, who agree to operate the business
as co-owners.
Advantages
Disadvantages
Easy to start
Skills and talented are pooled
More money available
Conflicts between partners
Profits must be shared
Owners share risk

14. Forms of Business Organizations
Corporation: Is a business organization that is recognized
by law as having a life of its own.
Must get permission from the state to operate, known as a
charter
Generally start as a sole proprietorship or a partnership
Stocks are sold to raise capital
Advantages
Disadvantages
Easier to raise money
Easy to expand
Easy to transfer ownership
Losses limited to investment
Cost more to start up
Complex to organize
More regulations
Higher taxes