Entrepreneurship

Entrepreneur

A person who starts and manages a business, taking risks to earn a profit.

Entrepreneurship

The process of creating, developing, and running a business to meet market needs.

Free-market economy

An economic system where businesses and consumers make decisions with limited government control.

Business laws

Rules that businesses must follow to operate legally.

Ethics

Moral principles that guide business decisions beyond the law.

Contracts

Legally binding agreements between parties.

OSHA

Government agency that ensures safe working conditions.

Risk

Chance of financial loss or harm.

Liability

Legal responsibility for damages or injuries.

Insurance

Financial protection against business risks.

Taxes

Pay for public services such as roads, schools, emergency services, and government operations.

Sole Proprietorship

A business owned and operated by one individual.

Partnership

A business owned by two or more individuals who share responsibilities and profits.

Corporation

A legal entity that is separate and distinct from its owners, providing limited liability.

LLC (Limited Liability Company)

A flexible business structure that combines the benefits of a corporation and partnership.

Licensing

Legal permission to operate a business.

Franchise

A business model where an owner buys the rights to use a company’s name and systems.

Franchise Disclosure Document (FDD)

Legal document outlining rules and financial obligations of franchising.

Bootstrapping

Using personal funds to start a business.

Debt financing

Borrowed money that must be repaid, such as loans.

Equity financing

Selling ownership shares to raise capital.

Cost of goods sold (COGS)

Direct costs to produce products.

Expenses

Costs required to operate a business.

Inventory

Goods held for sale, classified as an asset.

Stockouts

When inventory runs out, hurting sales and customer trust.

Productivity

Output compared to input.

Return on Investment (ROI)

Measure of profit compared to cost.

Accounts payable

Money owed to suppliers.

Trade credit

Buying now and paying later.

3 Cs of Credit

Character, Capacity, Capital.

Debt ratios

Used by banks to measure financial risk.