Commerce Chapter 1 02/06/2014
Profit to Risk Assumption
Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove
Market (Business to Consumer/B2C)
Products that are purchased for personal use.
Products are purchased for resale OR
For use in the manufacture of other products OR
For daily operations
Stakeholders are all the people who stand to gain or lose the policies and activities of a business.
Sourcing part of the purchased inputs outside of the country.
Assigning specific work such as accounting to outside organizations. The Five Factors of Production
Land and other natural resources are used to make homes, cars and other products
People have always been an important resource in producing goods and services but many people are now
being replaced with technology
Capital includes machines, tools, building and other means of manufacturing
All the resources in the world have little value unless entrepreneurs are willing to take the risk of starting
businesses to use those resources.
Information technology has revolutionized business, making it possible to quickly determine wants and
needs and to respond with desired goods and services.
The Business Environment The Legal Environment
Regulations are restrictions that provincial and federal laws place on businesses with respect to the conduct
of their activities.
Provinces and territories that have high taxes and restrictive regulations drive entrepreneurs out while areas
with low taxes and less restrictive regulations can attract entrepreneurs. The government can also lessen
the risks of entrepreneurship by passing laws that enable businesses to write contracts that are enforceable
TAX LAWS, CONTRACT LAWS, ELIMINATION OF CORRUPTION
The Economic Environment
The economic environment affects both businesses and consumers. It looks at income , expenditures and
resources that effect the cost of running a business. Businesses review the results of major economic
indicators such as consumer spending, employment levels and productivity. The movement of a country’s
currency relative to other currencies also pertains to this environment. A lower Canadian dollar value
relative to the US dollar makes our exports cheaper and more attractive to the US market, as consumers
can buy more products with their higher valued currency. One way for governments to promote
entrepreneurship is to allow private ownership of businesses.
INCOME AND EXENDITURES, CURRENCY SHIFTS, ECONOMIC SYSTEMS
Technology refers to inventions or innovations from science or engineering research.
One of the benefits of working with others is they provide you with technology that can make their business
more effective, efficient and productive. Efficiency is producing goods using the least amount of resources,
productivity is the amount of output you generate given the amount of input.
The buying and selling of goods and services over the internet.
Any information system or application that empowers business processes.
INFORMATION AND TECHNOLOGY, DATABASES, THE INTERNET
The Competitive Environment
Threat of New Entrants The easier it is