CHAPTER I: Taking Risks and Making Profits within the Dynamic Business Environment

 Successfully filling a market need means you could make money for yourself.
Entrepreneur — A person who risks time and money to start and manage a
business.
 Matching Risk with Profit. Risk — The chance an entrepreneur takes of losing
time and money on a business that may not prove profitable. Not all enterprises
make the same amount of profit. Businesses take risks, but with big risks could
come big profits.
 The Positives to Being an Entrepreneur: The freedom to succeed, Make your own
decisions, Possible wealth
 The Negatives to Being an Entrepreneur: The freedom to fail, No paid vacations,
No health insurance
 What makes rich countries rich today is entrepreneurship and knowledge.
 How Technology Benefits Workers and You: Effectiveness — Producing the
desired result. Efficiency — Producing goods and services using the least amount
of resources. Productivity — The amount of output you generate given the
amount of input (e.g., hours worked).
 Customers want good quality products at low prices with great customer service.

CHAPTER IV: Demanding Ethical and Socially Responsible Behavior

 Corporate social responsibility (CSR) — A business’s concern for the welfare of
society. CSR is based on a commitment to integrity, fairness, and respect.
 Responsibility to Customers. How do customers know about companies’ social
efforts? The primary use of social media is to communicate CSR efforts. Social
media allows companies to reach a broad, diverse group and connect directly to
them.

CHAPTER V: How to Form a Business

 Questions to Ask When Choosing a Business Partner — Do you share the
same goals? Do you share the same vision for the company? What skills does the
person have? Do they complement yours? What can the person bring to the
business? What type of decision maker is the person? Do you trust each other?
How does the person respond to adversity? Does he or she try to solve the
problem or try to defend his or her ego? Can the person accept constructive
criticism? To what extent can you build excitement into the partnership?
 Cooperative — A business owned and controlled by the people who use it—
producers, consumers, or workers with similar needs who pool their resources
for mutual gain.

CHAPTER VI: Entrepreneurship and Starting a Small Business

 Entrepreneurship — Accepting the risk of starting and running a business.
 Reasons to Take the Entrepreneurial Risk: Opportunity. Profit. Independence.
Challenge
 What Does It Take to be an Entrepreneur? Self-directed and self-nurturing.
Action-oriented. Highly energetic. Tolerant of uncertainty
 Turning Your Passions and Problems into Opportunities. An idea is a good
opportunity if: It fills customers’ needs. You have the skills and resources to start
a business. You can sell the product or service at a reasonable price and still
 profit. You can get your product or service to customers before the window of
opportunity closes. You can keep the business going.
 Entrepreneurial team — A group of experienced people from different areas of
business who join to form a managerial team with the skills to develop, make, and
market a new product.
 Encouraging Entrepreneurship: What Government Can Do
 Major Business Functions: Planning, Financing, Knowing customers, Managing
employees, Keeping records.
 Planning Your Business. Business plan — A detailed written statement that
describes the nature of the business, the target market, the advantages the
business will have in relation to competition, and the resources and qualifications
of the owner(s). A business plan forces potential owners to be specific about what
they will offer.
 Writing a business plan: A good plan takes a long time to prepare. A good
executive summary catches interest and tempts potential investors to read on.
Getting the plan into the right hands is almost as important as getting the right
information in it.
 Knowing Your Customers. Market — People with unsatisfied wants and needs
who have both resources and willingness to buy. Set out to fill the market’s needs
by offering top quality and great service at a fair price. One of the great
advantages of small businesses is the ability to know the market and quickly
adapt to market needs.
 Managing Your Employees. Hiring, training, and motivating employees is critical.
Employees of small companies are often more satisfied with their jobs because
they feel challenged and respected. Entrepreneurs best serve themselves and the
business if they recruit and groom employees for management positions.
 Keeping Records. A good accountant can help in: Deciding whether to buy or
lease equipment. Deciding whether to own or rent a building. Tax planning.
Financial forecasting. Choosing sources of financing. Writing requests for funds
 Marketing decisions need to be made long before introducing a product or
opening a store. A marketing research study can help you determine: Where
to locate. Whom to select as your target market. What is an effective strategy for
reaching the market.

CHAPTER IX: Production and Operations Management

 How can U.S. businesses maintain a competitive edge? Keeping up with latest
production techniques, Focusing on customers, Maintaining close relationships
with suppliers, Practicing continuous improvement.
 Production — The creation of finished goods and services using the factors of
production: land, labor, capital, entrepreneurship, and knowledge.
 Production management — The term used to describe all the activities
managers do to help firms create goods.
 Operations management — A specialized area in management that converts or
transforms resources (including human resources) into goods and services.
 Operations management includes: Inventory management, Quality control,
Production scheduling, Follow-up services