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Chapter One
Taking Risks
and Making
Profits within
the Dynamic
Business
Environment
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
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Profile
•A 17-year-old high school student
•Reopened small town’s only grocery store
•Borrowed $22,000 to buy building & fixtures
•Worked to save $10,000 to stock the store
•Worked 90-100 hours per week
•Paid off loan in one year
NICK GRAHAM
Main Street Market
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Entrepreneurship
and
Wealth Building
•Goods — Tangible products such as computers,
food, clothing, cars and appliances.
•Services — Intangible products that can’t be held in
your hand like, education, healthcare, insurance,
recreation and travel.
•Success in business is often based on the
strategy of finding a need and filling it.
GOODS and SERVICES
LG1
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Entrepreneurship
and
Wealth Building
•Business — Any activity that seeks to provide
goods and services to others while operating at a
profit.
•Entrepreneur — A person who risks time and
money to start and manage a business.
•Successfully filling a market need means you
could make money for yourself and provide jobs
for others.
BUSINESS and
ENTREPRENEURSHIP LG1
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Revenues,
Profits
and Losses
•Revenue — The total amount
of money a business takes in
during a given period by selling
goods and services.
•Profit — The amount of money
a business earns above and
beyond what it spends for
salaries and other expenses.
•Loss — Occurs when a
business’ expenses are more
than its revenues.
REVENUE, PROFIT AND LOSS
LG1
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Matching Risk
with Profit
•Risk — The chance an entrepreneur takes of losing
time and money on a business that may not prove
profitable.
•Businesses take risks, but with great risks
could come great profit.
RISK
LG1
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Businesses Add
to the Standard of
Living and Quality
of Life
Taxes are used to provide:
•Hospitals
•Schools
•Libraries
•Playgrounds
•Roads
•Fire Protection
•Police Protection
•Environmental Programs
•Support for People in Need
HOW IS TAX MONEY USED?
LG1
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Businesses Add
to the Standard of
Living and Quality
of Life
•Quality of Life — The general well-being of a
society in terms of its political freedom, natural
environment, education, healthcare, safety, amount
of leisure and rewards that add to personal
satisfaction.
QUALITY of LIFE
LG1
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Responding to the
Various Business
Stakeholders
•Stakeholders — All the people who stand to gain
or lose by the policies and activities of a business
STAKEHOLDERS
LG1
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Responding to the
Various Business
Stakeholders
OUTSOURCING
and INSOURCING LG1
