1. What do you think of when you hear the word business? What do you think of when you hear the word free enterprise? What do you think of when you hear the word profit? What do you think of when you hear the word loss?

10. Free Enterprise – 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. (Competition) (Profit) (Loss) Whatever its size a business must do two things to survive. It must operate at a profit, and it must attract and keep an individual willing to take the risk to run it. Need for profit Capital – money that investors, banks, or business owners supply is called capital

11. Entrepreneur – is a person who transforms ideas for products or services into real- world business. 1. Pros 2. Cons 3. Traits – Strong organizational skills, marketing knowledge, accounting expertise.

12. Types of Business Operations – Money that investors, banks, or business owners supply is called. 1. Service Business – provides a needed service for a fee. 2. Merchandising Business – buys finished products and resells then to individuals or other business. 3. Manufacturing Business – buys raw materials, uses labor, and machinery to transform them into finished products, and sells the finished products to individuals or other businesses.

13. Types of Business Ownership Sole Proprietorship – business owned by one person. Oldest form of business ownership. Partnership – is a business owned by two or more persons, called partners, who agree to operate the business as co-owners. Corporation - is a business recognized by law to have a life of its own. Must get permission from the state to operate. This legal permission, called a charter, gives a corporation certain rights and privileges. Corporations often start as sole proprietorships or partnerships. To raise money, organizes sell shares of stock to hundreds or even thousands of people. These shareholders, or stockholders are the corporation’s owners.

14. Sole Proprietorship Pros 1. Easy to startup 2. All profits go to owner 3. Owner has total control 4. Few regulations to follow Cons 1. Limited expertise 2. Hard to raise money 3. Owner has all the risks 4. Hard to attract talented employees

15. Partnership Pros 1. Easy startup 2. Easy to expand 3. More money available Cons 1. Risk of partner conflict 2. Shared profits 3. Shared risks

16. Corporation Pros 1. Easier to raise money 2. Easier to expand 3. Easy to transfer ownership 4. Losses to investment Cons 1. More complex 2. More costs to start 3. More regulation 4. Higher taxes