How do entrepreneurs use their resources to start businesses? Summary
Entrepreneurs are the hardworking visionaries who create new business enterprises. Such enterprises may be sale proprietorships, partnerships, corporations, business franchises, cooperatives, or nonprofit organizations.
What does it take to start a new business? The qualities needed to succeed in business include creativity, determination, and energy. Starting a business is financially risky, but success offers rewards, including unlimited earning potential and a sense of accomplishment.
What kinds of businesses are best organized as sole proprietorships? Sale proprietors tend to be people with a marketable skill who want to work for themselves. They reap the profits and are liable for debts. Small businesses and farms make up the majority of sale proprietorships.
What kinds of businesses are organized as partnerships? In a business partnership, two or more owners share profits and liability. Such businesses may be organized as general, limited, or limited liability partnerships. Family-owned businesses, law firms, and medical practices are common examples of partnerships.
Why are large businesses organized as corporations? The corporation is well suited for a large business because it can sell stock to raise financial capital, thus allowing for growth. It is a legal entity independent of its owners-the shareholders-and can thus exist indefinitely.
What purposes are served by franchises, cooperatives, and nonprofit organizations? Business franchises allow a franchiser to create a distribution network at low cost, while providing business opportunities to franchisees. Cooperatives provide benefits to their members. Nonprofits pursue particular public or private goals but do not operate to make a profit.
What rights and responsibilities do businesses have in a free enterprise system? Businesses have the legal right to advertise, to hire and fire, to screen employees, and to protect intellectual property, among other rights. Legal responsibilities include obtaining licenses and permits, paying taxes, honoring contracts, and using nondiscriminatory employment practices. Many companies have established ethical codes of conduct to guide their actions.