Economics - Business Organizations

Economics Chapter 8: Business Organizations

Chapter 8 explains how businesses are started and the advantages and disadvantages of:
- Sole proprietorships
- Partnerships
- Corporations
Section 1 explains the steps involved in starting a business.
It also covers the four elements of business operation that entrepreneurs need to consider.

Entrepreneurs: People who decide to start a business and are willing to take risks.
As an entrepreneur, you'll need to:
- Collect information about the business.
- Understand the factors of production.
- Learn about taxes and laws related to the business.
The form of ownership chosen has significant effects:
- Types of taxes the business must pay.
- Liability for the debts of the company.
- The way the firm can obtain financial resources.
Federal and state governments offer help to small businesses to encourage economic growth.
Small Business Administration (SBA): A national-level organization that helps finance startups.
- Startup: A beginning business enterprise.
Small Business Incubators: Private or government-funded agencies that assist new businesses by providing:
- Advice.
- Low-rent buildings.
- Low-cost supplies.
The Internet offers a great deal of information to help entrepreneurs.

Include wages, equipment, utility bills, rent, supplies, and inventory.
Inventory: Extra supply of items used in a business, such as raw materials or goods for sale.
"You have to spend money to make money."
Wages:
- Pay employees and yourself.
- Pay yourself a wage equal to what you would earn elsewhere initially. Avoid paying yourself too little or too much when starting the business.

Information about your company and the service or product you are selling.
During the startup phase, advertising reduces profit; there's no immediate return on investment.

Track all expenses and income.
Necessary for any business to be successful, from small businesses to large corporations.