Entrepreneurship: The Act of Starting a Business

The video explores entrepreneurship, focusing on sole proprietorships, partnerships, and franchises. It discusses the risks and rewards of starting a business, the characteristics of different business models, and their implications. Sole proprietorships are common and involve full personal liability. Partnerships offer shared responsibility and capital but vary in liability. Franchises provide brand recognition and support but come with strict rules and fees. Entrepreneurship drives economic growth and innovation, despite its risks.

What is a key characteristic of a sole proprietorship?

• It requires a board of directors

• The owner earns all profits and is responsible for all debts

• Limited liability for the owner

• Shared liability among owners

In a general partnership, how are responsibilities and liabilities typically shared?

• Liabilities are limited to the amount invested

• One partner has all the responsibility

• Partners are not responsible for business debts

• Responsibilities and liabilities are shared equally among partners

What is a major advantage of forming a partnership?

• Complete control by one partner

• Increased government regulation

• Enhanced ability to raise capital

• No need for a business plan

What is a franchise?

• A business owned by a group of investors

• A semi-independent business that pays fees to a parent company

• A non-profit organization

• A business owned by a single individual

Which of the following is a benefit of owning a franchise?

• Built-in reputation and brand recognition

• No fees to the parent company

• Complete freedom to alter products

• No need to follow any rules

What is a potential drawback of owning a franchise?

• No support from the parent company

• Low initial investment

• High level of creative freedom

• Strict rules and high fees

What are some potential rewards of entrepreneurship?

• Immediate profitability

• No financial risk

• Economic growth and innovation

• Guaranteed success