B284 ENTREPRENEURSHIP

Unit 2 Notes

Entrepreneurship Today

Knowledge of economics contributes to an understanding of how entrepreneurs and customers interact.

Economics – the study of how people allocate scare resources to fulfill their unlimited wants.

Competition is a key element in a market economy between similar business.

Free Enterprise System

Economic system in which people have important rights: to make economic choices of what products to buy, to own private property, and to choose to start a business and compete with other businesses.

Most democratic nations have a free enterprise system.

Profit is primary incentive of free enterprise Profit is money that is left over after all

expenses of running a business have been deducted from the income

Products

Goods and services are the products of our economic system.

Services are intangible (nonphysical) products that satisfy consumers’ wants and needs

Supply and Demand

Demand is the quantity of goods or services that consumers are willing and able to buy at various prices

Supply is the amount of goods or services that producers are willing to provide

Supply is continually shifting in the marketplace

Scarcity is the difference between demand and supply; limited resources

Supply and Demand Theory

If something is in heavy demand, but in short supply, prices will go up

If something is in heavy supply, but in short demand, prices will go down

Legal Issues Facing Start-Ups Intellectual Property Law protects the

inventions and new ideas of business The group of laws that regulates the

ownership and use of creative works Intellectual property laws protect the

following: trade secrets patents copyrights trademarks

Trade Secrets form the basis of all intellectual property

Trade secret may consist of a formula, an idea, a process, a pattern, or compilation, or information that gives the owner a competitive advantage

Legal Issues Facing Start-Ups

Legal Issues Facing Start-Ups Patent a document that grants to an

inventor the right to exclude others from making, using, or selling an invention or other intellectual property during the term of the patent

Public Domain is intellectual property whose protection has expired; it belongs to the community at large at people can use any aspects of the property free of charge

Legal Issues Facing Start-Ups Copyright is legal device that protects

original works of authors, including books, movies, musical compositions, and computer software, for the life of the author plus 70 years

Trademark a word, symbol, design, or color that a business uses to identify itself or something it sells

Legal Issues Facing Start-Ups Permits are needed before you start up a

business town, county, state, federal

Licenses may be needed depending on the business

License is a certificate that shows that the holder of the document has the necessary education and training to perform a job

Contracts are legally binding agreements between two or more parties

Locations

Only certain types of real property are available to business owners because they are subject to zoning laws and building codes

Lease is a long-term contract, an entrepreneur should consult an attorney before signing.