- Why do ethics matter in entrepreneurship?
As an entrepreneur, upholding ethical principles can be the difference between success and failure. Having ethics in business is about doing the right thing regardless of whether it is the easiest path to take or not. When an entrepreneur’s business decisions and actions are being guided by a strong moral compass, they can build strong reputations within their communities. Their reputation is what will help build trust with business partners, employees, and customers’ alike. The more trust in your business, the longer you will last and larger you will grow.
2. How does my own personal budget relate to an entrepreneurship budget? How are they different?
While both very important aspects of money management, in my opinion a personal budget is far less complex than an entrepreneurship budget. My personal budget is extremely predictable and tailored to my income and expenses. I know exactly how much will go to my bills, savings, and retirement each paycheck, and how much I have left for myself. I am also able to prepare ahead for high-cost expenses such as car or house repairs by maintaining a savings account with a predetermined amount. I can relate my personal budget expenses to those of an entrepreneur’s fixed expenses. In addition to fixed expenses, entrepreneurs must also estimate variable expenses. These are less predictable expenses and costs fluctuate based on different factors. Furthermore, income statements, cash flow statements, and balance sheets displaying assets, liabilities, and equity at any given time are aspects of a budget that an entrepreneur must learn.
3. Why do businesses need a budget or financial forecast?
Business need a budget for several reasons. When first starting a business it is imperative that a business estimate their sales, to include seasonal trends, potential vs. share, etc. to determine whether the business is set up for success in their specific area. Following this step, a business must be able to estimate costs in order to allocate resources effectively. This will ensure there is enough money to cover all of the operational and administrative costs, as well as potential for growth. Maintaining a budget also helps a business to make informed decisions by evaluating the business’ financial performance and making adjustments in underperforming areas as necessary Finally, a budget will help to prevent accidental or intentional money mismanagement.
4. Whats is your definition of social entrepreneurship? Give an example of an enterprise you read about from the Schwab Foundation website
Social entrepreneurship is multi-faceted and aims to fulfil several purposes. Whereas business entrepreneurships ultimate goal is wealth accumulation, social entrepreneurship seek social and/or environmental change in addition to wealth. Rebecca D. Onie co-founded ‘Health Leads’, and the organization is a great example of social entrepreneurship. The mission of the organization is to integrate healthcare and social services by enabling medical doctors to prescribe necessities such as food, housing, or job training. This empowers patients to access resources they were previously lacking, ultimately improving their health and quality of life. In true entrepreneurial spirit, Onie has discovered that employing college students as patient advocates helps to keep costs low and provides a solution to an understaffed profession.
5. What are the most significant legal issues entrepreneurs face?
There are different types of business structures that have common legal issues associated with them. A sole proprietorship is 100% dependent on the owner, who is personally liable for all business debts and legal obligations. A partnership holds all partners liable for business debts and actions, as well as any of the other partners actions. A C-Corporation must maintain strict adherence to state and federal regulations, while complying with complex tax regulations. S-Corporations must also comply with tax regulations, as well as maintain the eligibility requirements for S-Corporations. Finally, nonprofit organizations must maintain their tax-exempt status in accordance with IRS code, as well as report all financial information.