Why do ethics matter in entrepreneurship?
The main reason that ethics matter is that good ethics is just good business. Having the public and customers see you as an ethical business or service provider will have give them trust in you and your business. This will make it easier for customers to think about your business when they need something you provide. They know you can be trusted to be fair and do the right thing makes it easier for them to pick you over your competition. The old word of mouth is great advertising. The more you are ethical the more the word spreads that it is a good business the better chance of being successful. Being ethical in your business practices can also keep you out of trouble with the IRS and other legal issues.
How does my own personal budget relate to an entrepreneurship budget?
My own personal budget relates to a business budget in the fact that it is an important tool to help with business and my personal life. Personal budget helps me as a person look at my expenses and my income. The budget helps me keep expenses from overtaking income and put me in a bad financial position. Using a budget also helps businesses keep track of expenditures and revenue that is taking place and helps companies will future predictions of cost and revenue. The business budget is a little more complicated the idea is similar to a personal budget in that it helps give a financial picture of how they both are doing.
Why do we need budgets?
We need budgets to keep track of the finances of our businesses and our own personal lives. Businesses use budgets for many reasons. Businesses use them to make predictions of the coming year for both revenue and cost. Businesses use the budget to show investors how the business is doing now and into the future. Businesses use budgets when starting out to see the feasibility of the company. The business uses budgets to make changes to how they run for the year or for multiple years. Shows the business what the cash flow and break-even points are for them. The businesses use budgets to help them make balance sheets and figure out depreciation of equipment. Personal budgets help people keep a shot of how they are doing, so that they do not get in over their heads. People use budgets to see if they can afford a new home or if they should keep renting. The budget helps both businesses and people make better financial decisions in the short term and the long term.
What is social entrepreneurship?
Social entrepreneurship is a form of entrepreneurship where the idea of the business is not just profit, but to make a change. The social entrepreneur is trying to think of solutions to problems but is not worried about wealth, they are trying to change the system. These entrepreneurs are trying to apply business practices to solve social problems with self-sustaining business plans. These businesspeople are looking to make money and achieve social change. The money being used to help achieve the social change they are aiming to achieve. Unlike a charity which tends to have short term goals and relying on donations. The social entrepreneur is looking like stated before to have a true sustainable business to make the money to help with the social change goal. The entrepreneur also has added characteristics like empathy and want to make social difference. Based on the reading just like any business they face challenges. The social entrepreneur does face added challenges due to the fact that usually the social business have smaller margins and lower income future to find investors.
What are the most significant legal issues entrepreneurs face?
The most significant legal issue facing the entrepreneur is the form of which to make the company. The person starting the company has multiple options to choose from. Each form has its advantages and disadvantages in relation to taxation and liabilities. The entrepreneur will need to carefully look at each of the advantages and disadvantages along with the cost associated with the form to figure out which would be best. The form will also depend on how many people are involved in the formation of the company. The sole proprietor have the lowest cost but having the highest amount of liability to the proprietor. This form is very easy to form and has very little cost to create. This form does have the highest amount of liability in that the proprietor’s personal money and assets like house and car can be used to pay off the debt of the company in case of failure. A c-Corp being the costliest form to make and the one with the least amount of liability for the shareholders. This form is very complex and costly to form and will need the help of professionals who specialize in forming a C-Corp. C-Corp also has the least amount of liability in that it is just up to the amount of the shares the people own.