Taking Risks and Making Profits Within the Dynamic Business Environment
Francisco SanchezAssignment 1 NotesChapter 1Taking Risks and Making Profits within the Dynamic Business EnvironmentGetting To Know MONIF CLARKE of MONIFC.COM learning goal 1Describe the relationship between profit and risk, and show how businesses and nonprofit organizations can raise the standard of living for all..I. Entrepreneurship and Wealth Building A. Revenues, Profits, and LossesRevenues are what a business makes — revenues do not necessarily mean profits. A profit is the total amount of money made beyond expenses. Losses are things that occur when you are not making a profit. B. Matching Risk with ProfitYou often have to decide whether or not you are going to take a risk and if that will result in a profit. Sometimes you have to take a risk in order to profit. You have to do a cost benefit analysis. C. Standard of Living and Quality of LifeOften you want a high standard of living and quality of life in your business and personal needs. D. Responding to the Various Business StakeholdersBusinesses often have to respond to the interests of stakeholders. Sometimes businesses cannot make decisions without first speaking with them.
E. Using Business Principles in Nonprofit OrganizationsNonprofits do want to make profits — but not with the ability to often pay their employees with that money. A nonprofit still can run with business-like incentives. learning goal 2Compare and contrast being an entrepreneur and working for others.II. ENTREPRENEURSHIP VERSUS WORKING FOR OTHERS A. Opportunities for EntrepreneursMost businesses begin with entrepreneurs. They are definitely crucial to business. Entrepreneurs are often the ones that then create the ability for others to work for them. B. The Importance of Entrepreneurs to the Creation of Wealth. Entrepreneurs create business so they are obviously importan tto the creation of wealth. III. THE BUSINESS ENVIRONMENTlearning goal 3Analyze the effects of the economic environment and taxes on businesses. When businesses are taxed, there is a bit of a catch 22 situation. While they are making profits and this is usually considered to be important to tax, many would say that it hurts small businesses to “tax them to death.” So there is a bit of a struggle for businesses to succeed when they are taxed. Businesses, however, create wealth for the government when taxed.