Taking Risks and Making Profits within the Dynamic Business Environment

1633 WordsJul 10, 20147 Pages
Chapter 1 (page 4-19) Taking Risks and making Profits within the Dynamic Business Environment Business: 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 salaries and other expenses needed to run the business operation. Goods are tangible products such as computers, food, clothing, cards appliances and services include intangible products which cannot be held in your hand such as education, health care, insurance, recreation, travel and tourism. Entrepreneur is a person who risks time and money to start and manage a business. (Sam Walton started Wal Mart, Bill Gates started Microsoft) Revenue is the total…show more content…
Entrepreneurs use what they have learnt to grow their businesses and increase wealth. 5. Knowledge: Information technology has revolutionized business, making it possible to quickly determine wants and needs and to respond with desired goods and services. Management expert Business Consultant Peter Drucker introduced the 5th factor that is knowledge. Business Environment Business environment consists of the surrounding factors that either help or hinder the development of business. There are five elements of the business environment: The economic & legal environment The technological environment The competitive environment The social environment The global environment If we have the right environment, then we can succeed as a business and contribute to the society, country’s economy and as well as world economy. Right environmental conditions will ensure good schools, clean air & water, good health care and low rates of crime. Healthy working environment creates job growth, high standard of living and high quality of life. On the other hand, wrong environmental conditions result in business failures, loss of jobs, low standard of living and quality of life. The Economic and Legal Environment The job of the government: Minimize spending, keep taxes and regulations to a minimum, have policies that tend to favor business. Allow private ownership of business Minimize interference with the free exchange of
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