1. Discuss the ___________ enterprise system

2. Free Enterprise System Referred to as _________________. Encourages individuals to start and operate their own _____________________________ without government involvement. Allows the _______________________to determine prices through supply and demand.

3. Basic Economic Freedoms Freedom of _______________ Competition Risk __________

4. Freedom of ownership The _________________ to _____________choose a house, car, job or business. There are restrictions on how and where particular businesses can _________. Ex. zoning

5. Competition A ______________ between two or more businesses to gain as much of the total _____________ share or as possible. Helps maintain________________ prices, provides consumers with new and improved products and results in a _______________ selection of products from which to chose. Forces businesses to ___________________ in the most efficient manner possible.

6. Risk The potential for ___________ or failure.

7. Profit The essence of the ______________________________ system. The money earned from conducting business after all costs and expenses have been __________.

8. Advantages of Entrepreneurship Personal ________________________ to make key business decisions. Personal fulfillment and feeling of self worth Potential for ____________ income

9. Disadvantages of Entrepreneurship Risk associated with _______________________ _____ of income ________ can be long and often irregular

10. Sole Proprietorship A business owned and operated by _______ person ______% of all businesses in the US are sole proprietorships

11. Advantages of a Sole Proprietorship Ease of ___________ Limited government regulations including taxes Profits go to the ______________ Freedom in making business decisions

12. Disadvantages of a Sole Proprietorship Unlimited _____________________ Responsible for all aspects of the business including skills and _______________ Life of business is limited to the life or interest of the owner

13. Partnership A business owned and operated by ______ or more people. Less than ________% of all businesses in the US are partnerships

14. Types of _____________________ General partnership _________ partnership

15. General Partnership An ___________________ in which both partners agree to share equally in the profit and/or loss of the business Each partner is _______________ for all debts incurred by the business

16. ______________ Partnership Each partner is liable for any debts of the business up to the amount of his/her investment Must have at least ______________ partner who has ___________ liability

17. Advantages of Partnerships Relatively____________________ to start Combined financial resources and knowledge Shared management responsibilities Increased ________________ for profits Shared responsibility for risk ________________ less than a corporation A change in ownership does not alter the continuity of the business.

18. Disadvantages of Partnerships Partners can disagree about business decisions The decision or action of one partner is _______________ binding on the other partner, including ___________ If one partner ____________, the business is dissolved

19. Corporation A business owned by ____________________ A legal entity that is chartered by the state in which the business is located _____________, directors and officers manage the daily operations

20. Types of Corporations _____________ (closed) -- Do not offer shares of stock for sale to the general public ______________ (open) -- Offer shares of stock for sale to the general public Subchapter “S” – Taxed like a sole proprietorship and limited to 35 or less shareholders

21. Advantages of Corporations Delegation of specific management skills Limited liability for __________________ Life of the corporation is unlimited Easier to _____________ capital Stockholders can easily enter or leave the business by purchasing or _________________ stock

22. Disadvantages of Corporations Numerous_____________ restrictions Complex to start up and dissolve Taxed heavily Complex ___________________ keeping

23. Franchise A business or _____________________ with the right to use an established name and ________ trademarked products Granted to a retailer or a wholesaler for a fee

24. Advantages of Franchises ________________liability due to name recognition and common products Franchisor usually provides training Business plan is ____________________ by the franchisor, modified for the location and _________________

25. Disadvantages of Franchises Freedom to make business decisions is limited _________________________ may be expensive Supplies and products must be purchased _______________from the franchisor