Exploring the World of Business PDF
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This presentation outlines different types of businesses, such as service, merchandising, and manufacturing businesses. It also explores different forms of business organizations, such as sole proprietorships, partnerships, and corporations. The presentation includes the advantages and disadvantages of each type.
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# Exploring the World of Business ## Chapter 2.1 ## The Environment of Business - In a free enterprise system, people are free to produce the goods and services they choose. - Individuals are free to use their money as they wish: spend it, invest it, save it, or donate it. - Business owne...
# Exploring the World of Business ## Chapter 2.1 ## The Environment of Business - In a free enterprise system, people are free to produce the goods and services they choose. - Individuals are free to use their money as they wish: spend it, invest it, save it, or donate it. - Business owners must compete in order to continue to operate. - The amount of money earned over and above the amount spent is called profit. - Businesses that spend more money than they earn operate at a loss. ## The Need for a Risk-Taker - Entrepreneurs transform ideas for products or services into real-world businesses. - Motivated self-starters willing to take necessary risks to create profitable and useful businesses. ## Entrepreneurships ### Pros - You are your own boss. - You create opportunities for earning money. - You create and control your work schedule. - You choose the people you serve - You select the people who work with you. - You benefit from the rewards of your own hard work. - You choose your own work hours. ### Cons - You probably need to work long hours. - You lose the security of steady wages and medical benefits an employer provides. - You market your own services or products. - You pay for your own operating expenses. - You must be motivated and energetic each day. - You face the possibility of losing money. ## Types of Business Operations - **Service business** - Provides a needed service for a fee. - Travel agencies, styling salons, movers, repair shops, medical centers. - **Merchandising businesses** - Buys finished products and resells them to individuals or businesses. - Department stores, florists, hobby shops. - **Manufacturing Businesses** - Buys raw materials and transforms them into finished products through the use of labor and capital. - Bakery, shipbuilder ## Forms of Business Organization - **Sole Proprietorship** - a business owned by one person. ### Advantages - Easy to set up - All profits go to the owner - Owner has total control. - Few regulations to follow. ### Disadvantages - Limited expertise - Hard to raise money - Owner has all the risks - Hard to attract talented employees - **Partnership** - a business owned by two or more people. ### Advantages - Easy to start - Skills and talents are pooled. - More money available. ### Disadvantages - Conflicts between partners. - Profits must be shared. - Owners share all risks - **Corporation** - a business that is recognized by law to have a life of its own. - Charter: legal permission that gives a corporation rights and privileges. - Start out as a sole proprietorship or partnership and need to expand. - Shareholders are the legal owners of the operation. ### Advantages - Easier to raise money - Easy to expand - Easy to transfer ownership - Losses limited to investment ### Disadvantages - Cost more to start up. - Complex to organize. - More regulations. - Higher taxes.
