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Commerce 1E03 chapter notes.docx

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McMaster University
Rita Cossa

Commerce 1E03 Chapter 1 425 BusinessEntrepreneurship Revenues ProfitsLosses Business is any activity that seeks to provide goods and services to others while operating at a profit revenue over expenses An Entrepreneur is a person who risks time and money to start and manage a businessin 2009 forbes magazine stated that there were 790billionares around the world 20 being Canadian Businesses do not only make money they offer necessities such as food clothing housing medical care transportation as other goodservices to make our lives easier Revenue is the total amount of money a business takes in during a given period by selling goodservices Losses occur when a businesss expenses exceed its revenuesapprox 125000 business exit the marketplace each year most business failures are due to poor management andor associated with cashflow Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove profitablecompanies that take the most risk earn most profit Stakeholders are all people who stand to gain or lose by the policiesactivities of a business have partial ownership of the business Offshoring entails sourcing part of the purchased inputs outside of the country While Outsourcing means contracting with other companies to do some or all of the functions of a firm such as accounting production generally this security maintenance and legal work to outside organizations In Canada most of the offshoring that occurs is with the USANPO is an organization whose goals do not include making personal profit for its owners or organizersNonprofit organizations often do strive for financial gains but such gains are used to meet the stated social or educational goals of the organization rather than personal profit Social Entrepreneurs are people who use business principles to start and manage NPO and help countries with their social issues Factors of Production 1 Land or natural resources 2 Labour workers 3 Capital Goods machines tool buildings etc 4 Entrepreneurship 5 Knowledge Usually we see only 4 Factors of production which exclude knowledge but expert Peter Drucker states that knowledge is and will always be the most importantWhat makes rich countries prosperous is the combination of entrepreneurship and the effective use of knowledgeThe business environment consist of the surrounding factors that either help or hinder the development of a business factors include othe legal and regulatory enviro economic envir o technological envir o the competitive envir o social envir o global envir The competition act of Canada is to promote efficiency and adaptability in the Canadian economy by recognizing the impact of foreign competition in CanadaRegulations are rules made by the government eg industry Canada to carryout the purposes set out in statues Return on investments ROI AKA profit after investingThe economics environment looks at income expenditures and resources that affect the cost of running a businessTechnology refers inventions or innovations from applied science or engineering researchProductivity is the amount of output you generate given the amount of inputEffectiveness means producing the desired amountCompanies often look at technology to enable them to be more efficient effective and productive Ecommerce is the buying and selling of goods and services over the internet
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