1.     Why do ethics matter in entrepreneurship?

Ethics in entrepreneurship matter due to a variety of reasons. For one, many ethical violations may have legal repercussions. How an entrepreneur treats employees could potentially diminish their effectiveness, or potentially open themselves to lawsuits. Another reason that ethics contribute to the success of an entrepreneur is reputation. An entrepreneur with unethical practices would develop a negative reputation. Should the entrepreneur attempt to hire skilled workers, potential employees may avoid the company altogether to avoid associating themselves with potential unethical practices. Consumers may also avoid purchasing goods and services from unethical businesses. Without consumers purchasing the product or employees assisting in production the business venture would fail.

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

My budget is closely related to an entrepreneurship budget as it is reflective of how I would manage finances. For example, making poor financial decisions would not inspire faith in others to run a business venture. Finding potential investors would be difficult, as also attempting to obtain loans since many investors tend to look at a person’s financial history. It would also play a role should I use my finances to fund my business. Not only would I have to allocate money towards everyday needs such as rent and food, but also towards paying employees along with supplies for the business.

3.     Why do we need budgets?

Budgets are necessary to ensure efficiency, planning, and measure milestones. Budgeting helps with allocating resources appropriately ensuring that each area receives the necessary amount of funding and excess spending. It also allows for planning and future expansion. Entrepreneurs can plan accordingly and make the appropriate investments if they want to expand their business. A proper budget can help in preparing for emergencies. By allocating resources towards an emergency, the company would mitigate the amount of hardship they experience. Lastly, a budget could be used to measure milestones and goals an entrepreneur wishes to accomplish. For instance, wanting to have a certain amount of positive net income can serve as a goal or milestone for an entrepreneur. From here the entrepreneur could expand their venture and invest in higher quality.

4.     What is social entrepreneurship?

Social entrepreneurship is a venture that attempts to address a social issue from a business perspective. For instance, a nonprofit organization offering after-school programs in a low-income area. This example would address the issue of social inequality within a community by allowing low-income families easier access to after-school activities. It would also ease the burden of working families seeking childcare facilities and potentially reduce crimes committed by younger perpetrators. Social entrepreneurship may also operate for profit but focus on community development. Social entrepreneurship does not have to be limited to the entrepreneur’s immediate environment. Some ventures attempt to address world issues, such as climate change reducing the impact of pollution on ecosystems throughout the world.

5.     What are the most significant legal issues entrepreneurs face?

One legal issue that entrepreneurs face when starting a business comes in the form of failing to meet contractual obligations. For example, failing to repay loans taken out to start the business. Banks or investors may take potential legal action against the entrepreneur for failing to fulfill contractual agreements. Other legal issues may involve compliance with local and federal laws. An entrepreneur might not realize they violate local laws and ordinances since requirements vary from state to state. For instance, disposing of waste or any byproduct created by the company. Some entrepreneurs may be tempted to take shortcuts to cut costs. Lastly, another legal issue entrepreneurs may face is how they handle customers’ personal information. This would include customer contact information and financial information that is exchanged for a good or service. Not appropriately securing this information would lead to serious legal repercussions for the entrepreneur.