1. The Business of Free Enterprise

2.  Entrepreneur—A person who takes a risk to create a new product or to develop a better way to operate a business.  A true free enterprise system must encourage people to be entrepreneurs.

3.  Charles Darrow  Ray Kroc  Henry Ford  Clarence Birdseye  Debbie Fields  King Gillette  Liz Claiborne

4.  Some start at an early age.  Some develop and sell ordinary products.  Some find new ways to sell.

5.  Some spot new markets and develop new products for them.  Some work to perfect ideas they had for years.  Some work within an existing business.

6.  Unexpected Opportunities  Changing Market Conditions  Improving a Product or Process  Providing an Alternative Good or Service  Identifying Popular Trends

7.  Small Business—Annual sale under $3.5 Million.  Have many advantages over big businesses

8.  Ability to adapt to change more quickly.  Ability to satisfy special markets.

9.  Poor management  Inadequate Financing  Inability to hire highly qualified workers

10.  Sole Proprietorship  Partnership  Corporation

11.  S Corporations  Not-For-Profit Corporations  Government-Owned Corporations  Limited Liability Companies  Cooperatives  Franchises

12.  Small business that can have no more than 35 stockholders.  Do not have to pay higher level of corporate taxes.

13.  Serve an educational, social, charitable, or religious purpose.  Not subject to income tax.

14.  Government usually opens a corporations when the market doesn’t adequately supply a needed good or service.  Example: Federal Deposit Insurance Corporation (FDIC)

15.  Combine the advantages of a corporation and a partnership.  Popular among internet start-up companies.

16.  Associations of individual companies that perform business functions for their members.  Housing  Consumer  Producer

17.  A license to operate and individually owned business as if it were a large chain of stores.  McDonald’s, Subway