Why do ethics matter in entrepreneurship?

No matter what product or service you are offering, your enterprise will likely not survive without a good ethical foundation. I define a positive ethical foundation as a business that has a good standing in the community, by being reliable (not making false product or service claims), keeping promises (standing by their word when making deals or agreements), treating customers fairly (if one gets the deal then they all get the deal), responsible (admitting when you are at fault), and being upfront (not hiding anything from perspective buyers). If a company is known to be a disreputable business, then repeat or new customers will stop or decide not to do business with them. An example of a business with a history of checkered ethics is Wells Fargo Bank and the 2016 fake account scandal. Wells Fargo management and employees fraudulently created fake bank deposit and credit card accounts using their current banking customers information without their knowledge or permission. Of course, this is one of many unethical business practices Wells Fargo has been caught implementing through the years. With the knowledge that Wells Fargo uses unethical business practices for monetary gain, would you want to do or continue to do business with this company? Personally, I would not and will not and it even surprises me the company is still in existence. The point here is that without a good reputation, it is difficult for a business to survive no matter what product or service you offer, because without trust the business cannot preserve their returning customer base and/or attracting future customers and investors.

How does my own personal budget related to an entrepreneurship budget?

I relate my personal budget to an entrepreneurship budget as one in the same. A personal budget is a spending plan that provides a framework of your monetary capital by illustrating how much you possess in each period (monthly, quarterly, or yearly). Additionally, it is there to assist you in predicting your positive and negative cashflow, so you do not overspend and run out of money. A business budget is the same principle as where you want to ascertain and analyze your positive and negative cashflow, so the business is not running at a deficit. You always strive to run a business at a profit net-gain, because if the business continues to run at a loss, then the business will not have the ability to pay employees, advertising, products, or invest in future products or services. Another relation between the two is how you use your budget once it has been established; if you have good habits by spending within the confines of the planned personal budget then you will be a good steward of a business budget, because one again you want to make sure your business is making positive revenue.

Why do we need budgets?

One reason we need budgets is to ensure the business is not overspending and running at a loss (financial security). If a business is running at a deficit, then it will not be able to meet its financial demands or goals such as: rent (office building, equipment, etc.), employee’s paychecks, utilities, advertisements (business cards, webpages, TV or internet commercials, etc.), insurance, business license(s), or future investments (products, services, other businesses (to corner the market), etc.). Another reason budgets help is to prioritize what money is allocated to what department or project. This assists by making sure that the amount of money spent is on the necessary projects or departments, so the business continues to grow. Another reason budgets are required is that it will show you the areas your business is doing well and not as good so can make better financial decisions. Without a budget your business’s spending will be out of control and will likely go bankrupt and close.

What is social entrepreneurship?

Social entrepreneurships are business centered around social and environmental causes. They focus on things like the planet (climate change, plastic pollution, fossil fuels, etc.), people (developing of minority relations, law enforcement change, food insecurities and deserts, etc.), and of course profit (so they can pay employees, advertise the cause, etc.). An example of a social business is the Surf Rider Foundation (https://www.surfrider.org/). The business is centered around planet conservation by cleaning up plastic pollution, obtaining full and unrestricted access to beaches, protecting coastal waterways, and clean water sustainability.

What are the most significant legal issues entrepreneurs face?

Entrepreneurs face many legal challenges during the life of a business. One that comes to mind is over the protection of intellectual property, as the business needs to make certain that the product they are offering, does not contain others trademark or copyrighted materials; furthermore, you want to keep others from stealing your intellectual property as well.  Another problem entrepreneurs face is filing of business taxes. There are a tremendous amount of tax rules and regulations the business must know to forgo an IRS audit. This is why it is important not to handle taxes yourself (unless you are a licensed accountant that knows the tax code) to hire a knowledgeable and ethical tax accountant to handle this burden. Another legal issue that can come up is the signing of a Non-disclosure Agreements (NDA) if your employees are working on any type of intellectual property. This is so the business can protect its investment by making sure the employee does not share with a rival company or use it to start one of its own. One other example of legal issues a business might face is not separating business assets from personal assets. This is important because if your business and personal properties are not handled correctly, the entrepreneur runs the risk of losing everything if it is ever sued.