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The B usiness Environment

The B usiness Environment. Holloway BUA-101 / EMCC. Entrepreneurship and Wealth Building. GOODS and SERVICES. Terms you need to know…. Goods -- Tangible products such as computers, food, clothing, cars and appliances.

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The B usiness Environment

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  1. The Business Environment Holloway BUA-101/EMCC

  2. Entrepreneurship and Wealth Building GOODS and SERVICES Terms you need to know… • Goods -- Tangible products such as computers, food, clothing, cars and appliances. • Services -- 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 others. 1-2

  3. Entrepreneurship and Wealth Building BUSINESS and ENTREPRENEURSHIP Terms you need to know… • Business -- Any activity that seeks to provide goods and services to others while operating at a profit. • Entrepreneur-- 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. 1-3

  4. Revenues, Profits and Losses REVENUE, PROFIT AND LOSS Terms you need to know… • Revenue -- The total amount of money a business takes in during a given period by selling goods and services. • Profit -- The amount of money a business earns above and beyond what it spends for salaries and other expenses. • Loss -- Occurs when a business’s expenses are more than its revenues. 1-4

  5. Matching Risk with Profit RISK Terms you need to know… • Risk -- 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. • Businesses take risks, but with great risks could come great profit. 1-5

  6. What about Taxes?

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

  8. Responding to the Various Business Stakeholders STAKEHOLDERS • Stakeholders -- 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? • Customers • Employees • Stockholders • Suppliers • Dealers • Community Members • Media • Elected Officials • Bankers • Environmentalists 1-8

  9. Entrepreneurship Versus Working for Others THE UPS and DOWNS of ENTREPRENEURSHIP • 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

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

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

  12. The Business Environment WHAT is theBUSINESS ENVIRONMENT? 1-13

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

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

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

  16. The Global Environment INCREASING COSTS of the GLOBAL ENVIRONMENT LG7 • 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. 1-17

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

  18. Choose a Business… anybusiness! • 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.

  19. Thanks!

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