B284 ENTREPRENEURSHIP
Unit 2 Notes
Entrepreneurship Today
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Knowledge of economics contributes to an
understanding of how entrepreneurs and customers
interact.
Economics – the study of how people allocate scare
resources to fulfill their unlimited wants.
Competition is a key element in a market economy
between similar business.
Free Enterprise System
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Economic system in which people have important
rights: to make economic choices of what products
to buy, to own private property, and to choose to
start a business and compete with other businesses.
Most democratic nations have a free enterprise
system.
Profit is primary incentive of free enterprise
Profit is money that is left over after all expenses of
running a business have been deducted from the
income
Products
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Goods and services are the products of our
economic system.
Services are intangible (nonphysical) products that
satisfy consumers’ wants and needs
Supply and Demand
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Demand is the quantity of goods or services that
consumers are willing and able to buy at various
prices
Supply is the amount of goods or services that
producers are willing to provide
Supply is continually shifting in the marketplace
Scarcity is the difference between demand and
supply; limited resources
Supply and Demand Theory
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If something is in heavy demand, but in short supply,
prices will go up
If something is in heavy supply, but in short demand,
prices will go down
Legal Issues Facing Start-Ups
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Intellectual Property Law protects the inventions
and new ideas of business
The group of laws that regulates the ownership and
use of creative works
Intellectual property laws protect the following:
 trade
secrets
 patents
 copyrights
 trademarks
Legal Issues Facing Start-Ups
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Trade Secrets form the basis of all intellectual
property
Trade secret may consist of a formula, an idea, a
process, a pattern, or compilation, or information
that gives the owner a competitive advantage
Legal Issues Facing Start-Ups
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Patent a document that grants to an inventor the
right to exclude others from making, using, or selling
an invention or other intellectual property during the
term of the patent
Public Domain is intellectual property whose
protection has expired; it belongs to the community
at large at people can use any aspects of the
property free of charge
Legal Issues Facing Start-Ups
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Copyright is legal device that protects original
works of authors, including books, movies, musical
compositions, and computer software, for the life of
the author plus 70 years
Trademark a word, symbol, design, or color that a
business uses to identify itself or something it sells
Legal Issues Facing Start-Ups
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Permits are needed before you start up a business
 town,
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county, state, federal
Licenses may be needed depending on the business
License is a certificate that shows that the holder of
the document has the necessary education and
training to perform a job
Contracts are legally binding agreements between
two or more parties
Locations
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Only certain types of real property are available
to business owners because they are subject to
zoning laws and building codes
Lease is a long-term contract, an entrepreneur
should consult an attorney before signing.