2 What is Entrepreneurship An individual who undertakes the creation, organization, and ownership of an innovative business with potential for growthEntrepreneurshipThe process of recognizing or creating an opportunity, testing it in the market, and gathering the resources necessary to go into business
3 Benefits to Society Contributions made by Entrepreneurs to society Recognize consumer wants and needs—turn demand into supplyCreate a market for venture capitalistsProvide jobs for communitiesCan change societySteve Jobs, Mark ZuckerbergWhat Entrepreneurs Contribute To Society(Video)
4 Rewards and Risks Competition Long Hours Uncertain Income Be your own bossDo something you enjoyExpress creativitySet your own scheduleJob securityPotential for greater incomeCompetitionLong HoursUncertain IncomeFull ResponsibilityMay lose investment
5 What Makes a Successful Entrepreneur? Characteristics of a successful entrepreneur (not an exhaustive list!)ConfidentDeterminedResourcefulResponsibleGoal orientedCreativeFlexibleSelf motivatedRisk takerOnline Personality Quiz
6 Rewards and Risks Competition Long Hours Uncertain Income Be your own bossDo something you enjoyExpress creativitySet your own scheduleJob securityPotential for greater incomeCompetitionLong HoursUncertain IncomeFull ResponsibilityMay lose investment
7 What Makes a Successful Entrepreneur? Characteristics of a successful entrepreneur (not an exhaustive list!)ConfidentDeterminedResourcefulResponsibleGoal orientedCreativeFlexibleSelf motivatedRisk takerOnline Personality Quiz
8 Sole ProprietorshipThe easiest and most popular form of business ownership is the sole proprietorship.sole proprietorshipa business that is owned and operated by one person
9 The owner of a sole proprietorship: receives the profits,incurs any losses, andis liable for the debts of the business.
10 Sole ProprietorshipIn a sole proprietorship the owner must decide how much liability protection he or she needs.liability protectioninsurance against the debts and actions of a business
11 Advantages Sole Proprietorship Sole proprietorship is easy and inexpensive to create.The owner has complete authority over all business activities.It is the least regulated form of business ownership.The business pays no taxes; income is taxed at the personal rate of the owner.11
12 Disadvantages Sole Proprietorship The owner has unlimited liability. Raising capital is more difficult.The business is totally reliant on the skills and abilities of the owner.The death of owner dissolves the business unless there is a will to the contrary.12
13 DisadvantagesThe biggest disadvantage of a sole proprietorship is financial.In this form of business ownership, the owner has unlimited liability.unlimited liabilityfull responsibility for all debts and actions of a business
14 Partnerships partnership A partnership draws on the skills, knowledge, and financial resources of more than one person.partnershipan unincorporated business with two or more owners who share the decisions, assets, liabilities, and profits
15 Advantages Partnerships Partnerships are inexpensive to create. General partners have complete control.Partners can share ideas.Partners can secure investment capital more easily and in greater amounts.15
16 Disadvantages Partnerships It is difficult to dissolve one partner’s interest without dissolving the partnership.There may be personality conflicts.Partners can be held liable for each others’ actions.16
17 The Main IdeaIn a corporation, the owners of the business are protected from liability for the actions of the company.
18 What Is a Corporation? There are three types of corporations: C-corporationSubchapter S corporationnonprofit corporationcorporationa business that is registered by a state and operates apart from its owners; it issues shares of stock and lives on after the owners have sold their interest or passed away
19 C-Corporation A C-corporation is the most common corporate form. an entity that pays taxes on earnings; its shareholders pay taxes as well
20 C-CorporationIn smaller corporations, the founders generally are the major shareholders.shareholdersthe owners of a corporation
21 ability to raise investment money C-CorporationAdvantagesstatuslimited liabilityability to raise investment moneyperpetual existenceemployee benefitstax advantages21
22 Disadvantages C-Corporation expensive to set up income more heavily taxedsubject to double taxation on incomepays taxes on profitsstockholders taxed on dividends22
23 Nonprofit Corporation A nonprofit corporation must fall within one of four categories:religioncharitypublic benefitmutual benefitnonprofit corporationa legal entity that makes money for reasons other than the owner’s profit; it can make a profit, but the profit must remain within the company
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