chpt1 - 4 PART I Business Trends C ultivating a Business In...

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4 business Any activity that seeks to provide goods and services to others while operating at a profit. profit The amount of money a business earns above and beyond what it spends for salaries and other expenses. entrepreneur A person who risks time and money to start and manage a business. revenue The total amount of money a business takes in during a given period by selling goods and services. loss When a business's expenses are more than its revenues. ---------------------, Hot dog vendors have expenses to pay, just like any other business. They have to subtract those expenses from revenues to determine what profit they make. What kind of expenses might street vendors avoid relative to those entrepreneurs who establish restaurants? PART I * Business Trends: Cultivating a Business In Diverse, Global Environments .~-~- BUSINESS AND ENTREPRE EURSHI REVENUES, PROFITS, AND LOSSES Michele Hoskins is just one of thousands of people who have learned that one of the best ways to become a success in the United States, or almost anywhere else in the world, is to start a business. A business is any activity that seeks to provide goods and services to others while operating at a profit. Profit is the amount of money a business earns above and beyond what it spends for sala- ries and other expenses. Since not all businesses make a profit, starting a busi- ness can be risky. An entrepreneur is a person who risks time and money to start and manage a business. Businesses provide people with the opportunity to become wealthy. Sam Walton of Wal-Mart began by opening one store in Arkansas and, over time, became the richest person in America; his heirs now have many billions of dol- lars. Bill Gates started Microsoft and is now the richest person in the world. Forbes magazine reports that there are at least 793 billionaires in over 40 dif- ferent countries.! Maybe you will be'one of them someday if you start your own business. Businesses don't just make money for entrepreneurs. Businesses provide all of us with necessities such as food, clothing, housing, medical care, and transportation, as well as other goods and services that make our lives easier and better. Matching Risk with Profit Profit, remember, is the amount of money a business earns above and beyond what it pays out for salaries and other expenses. For example, if you were to \ , start a business selling hot dogs in the summer, you would have to pay for the cart rental, for the hot dogs and other materials, and for someone to run the cart while you were away. After you paid your employee and yourself, paid for the food and materials you used, paid the rent on the cart, and paid your taxes, any money left over would be profit. Keep in mind that profit is over and above the money you pay yourself in salary. You could use any profit you make to rent or buy a second cart and hire other employees. After a few summers, you might have a dozen carts employing dozens of workers. Revenue is the total amount of money a business takes in during a given period by selling goods and services. A loss occurs when a business's expenses
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This note was uploaded on 02/16/2010 for the course BUS 111 taught by Professor Campolo during the Spring '08 term at SUNY Stony Brook.

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chpt1 - 4 PART I Business Trends C ultivating a Business In...

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