How to Listen to a Driver

I. WHAT IS A BUSINESS?

Describe how businesses and nonprofit organizations add to a country’s standard of living and quality of life.

A. BASIC CONCEPTS

1. A BUSINESS is any activity that seeks profit by providing goods and services to others.

2. PROFIT is the amount a business earns above and beyond what it spends. CONCEPT CHECK

3. Businesses also provide people with the opportunity to become wealthy.

B. BUSINESSES CAN PROVIDE WEALTH AND A HIGH QUALITY OF LIFE FOR ALMOST EVERYONE.

1. ENTREPRENEURS are people who organize, operate, and assume the risk of starting a business.

2. Businesses are a part of an economic system that helps to create a higher standard of living and quality of life for everyone.

3. The QUALITY OF LIFE of a country refers to the general well-being of a society

C. NONPROFIT ORGANIZATIONS USE BUSINESS PRINCIPLES.

1. Nonprofit organizations such as government agencies, public schools, charities, and social causes help make a country more responsive to all the needs of citizens.

2. A NONPROFIT ORGANIZATION is an organization whose goals don’t include making a profit for its owners.

3. You need the SAME SKILLS to work in nonprofit organizations that you need in business, including information management, leadership, marketing, financial management.

4. Businesses, nonprofit organizations, and volunteer groups often strive to accomplish the same objectives.

I.

II. ENTREPRENEURSHIP VERSUS WORKING FOR OTHERS.

Explain the importance of entrepreneurship to the wealth of an economy and show the relationship of profit to risk assumption

A. There are TWO WAYS TO SUCCEED IN BUSINESS:

1. One way is to rise up through the ranks of a large company.

2. The more risky path is to start your own business.

B. OPPORTUNITIES FOR ENTREPRENEURS.

1. Millions of people have taken the entrepreneurial risk and succeeded.

2. Entrepreneurs have come from all over the world to prosper in America.

a. The number of Hispanic-owned businesses in the United States grew by 76% in the 1990s.

b. Increases have also been made by Asians, Pacific Islanders, American Indians, and Alaskan Natives.

3. The number of women business owners has also dramatically increased.

C. MATCHING RISK WITH PROFIT

1. Not all businesses make a profit; profit is revenue minus expenses.

2. REVENUE is the money a business earns by selling goods and services.

3. A LOSS occurs when a business’s costs and expenses are more than its revenue, the money a business earns by selling its products.

4. RISK is the chance you take of losing time and money on a business that may not prove profitable. CONCEPT CHECK

5. Rewards and risk are related.

a. Those companies that take the most risk may make the most profit.

b. As a potential business owner, you should do research to find the right balance between risk and profit.

D. THE FACTORS THAT ARE NEEDED TO CREATE WEALTH

1. THE FACTORS OF PRODUCTION the resources businesses use to create wealth.

a. LAND (and other natural resources)

b. LABOR (workers)

c. CAPITAL (e.g., money, machines, tools, and buildings)

d. ENTREPRENEURSHIP

e. KNOWLEDGE.

2. Some experts believe that the most important factor of production is KNOWLEDGE.

3. What makes rich countries rich is a combination of entrepreneurship and the effective use of knowledge.

4. Entrepreneurship also helps make some states and cities rich while others