1. B284 ENTREPRENEURSHIP Unit 2 Notes

2. Entrepreneurship Today  Knowledge of economics contributes to an understanding of how entrepreneurs and customers interact.  Economics – the study of how people allocate scare resources to fulfill their unlimited wants.  Competition is a key element in a market economy between similar business.

3. Free Enterprise System  Economic system in which people have important rights: to make economic choices of what products to buy, to own private property, and to choose to start a business and compete with other businesses.  Most democratic nations have a free enterprise system.  Profit is primary incentive of free enterprise  Profit is money that is left over after all expenses of running a business have been deducted from the income

4. Products  Goods and services are the products of our economic system.  Services are intangible (nonphysical) products that satisfy consumers’ wants and needs

5. Supply and Demand  Demand is the quantity of goods or services that consumers are willing and able to buy at various prices  Supply is the amount of goods or services that producers are willing to provide  Supply is continually shifting in the marketplace  Scarcity is the difference between demand and supply; limited resources

6. Supply and Demand Theory  If something is in heavy demand, but in short supply, prices will go up  If something is in heavy supply, but in short demand, prices will go down

7. Legal Issues Facing Start-Ups  Intellectual Property Law protects the inventions and new ideas of business  The group of laws that regulates the ownership and use of creative works  Intellectual property laws protect the following:  trade secrets  patents  copyrights  trademarks

8.  Trade Secrets form the basis of all intellectual property  Trade secret may consist of a formula, an idea, a process, a pattern, or compilation, or information that gives the owner a competitive advantage Legal Issues Facing Start-Ups

9.  Patent a document that grants to an inventor the right to exclude others from making, using, or selling an invention or other intellectual property during the term of the patent  Public Domain is intellectual property whose protection has expired; it belongs to the community at large at people can use any aspects of the property free of charge

10. Legal Issues Facing Start-Ups  Copyright is legal device that protects original works of authors, including books, movies, musical compositions, and computer software, for the life of the author plus 70 years  Trademark a word, symbol, design, or color that a business uses to identify itself or something it sells

11. Legal Issues Facing Start-Ups  Permits are needed before you start up a business  town, county, state, federal  Licenses may be needed depending on the business  License is a certificate that shows that the holder of the document has the necessary education and training to perform a job  Contracts are legally binding agreements between two or more parties

12. Locations  Only certain types of real property are available to business owners because they are subject to zoning laws and building codes  Lease is a long-term contract, an entrepreneur should consult an attorney before signing.