Factors of Production
This factor of production includes people and all their efforts and abilities, such as a cashier ringing up sales or a doctor treating patients.
What is labor?
This type of business is the easiest and cheapest to start, but the one owner has unlimited liability.
What is a sole proprietorship?
The person who purchases the license to open a franchise and use the franchise's business knowledge, processes, and trademarks
What is a franchisee?
The goal of a business
What is a profit?
One negative of being a corporation is how taxes are handled
What is double taxation?
Oil wells, farmland, and forests are examples of this “gift of nature” factor of production.
What is land?
In this type of business, two or more people share responsibilities, investments, and profits.
What is a partnership?
The owner of the franchise's brand and business model
What is a franchisor?
An organization whose goals do not include making a profit.
What is a non-profit organization?
When a company purchases and absorbs another company's assets through a financial transaction
What is an acquisition?
Factory machines, delivery trucks, and computers used to produce goods and services fall under this factor of production.
What is capital?
This form of business is a separate legal entity that can raise funds by selling stock, but it faces double taxation.
What is a corporation?
These types of businesses, which operate under a larger brand’s name and system, are more likely to survive the first 10 years after opening compared to independent businesses.
What are franchises?
The total amount of money a business makes by selling their product or service
What is revenue?
This person has to work long hours, but gets to be their own boss as they create their own company
What is an entrepreneur?
When Oprah Winfrey launched her own TV network or when Steve Jobs introduced the iPhone, they demonstrated this factor of production.
What is entrepreneurship?
To establish this type of business, owners must file Articles of Incorporation and create bylaws, making it more expensive and complex to start.
What is a corporation?
Franchisees often pay this ongoing fee to the franchisor to help cover the costs of national and regional advertising campaigns.
What are advertisement royalty fees?
Profit is calculated by subtracting the costs from this.
What is revenue?
A sole proprietor or partner could lose their own assets and possessions if the business fails
What is unlimited liability?
A startup clothing company uses cotton from farms, sewing machines, fashion designers, and a founder willing to risk their savings. Together, these represent all four factors of production.
What are land, capital, labor, and entrepreneurs?
This kind of partner has unlimited liability and actively manages the firm.
What is a general partner?
This business is Entrepreneur's Franchise 500 top franchise of 2025
What is Taco Bell?
When two companies combine into one new company
What is a merger?
The objective of a business is to balance survival, growth, and ______ in order to make profit. This piece involves considering the larger impact on society as a whole when making decisions
What is social responsibility?