AP Business with Personal Finance · Summary

Unit 1 summary

  1. Profit = revenue - all expenses. Sole proprietors and general partners have unlimited liability; corporation and LLC owners have limited liability.
  2. Market structures run from perfect competition (many sellers, identical products) to monopoly (one seller); an oligopoly has a few large sellers who watch each other.
  3. A competitive advantage must be hard to copy; build it through low cost, differentiation or focus. Market share = firm’s sales / market sales x 100.
  4. PESTEL sorts outside forces: political, economic, social, technological, environmental, legal. The same force can be an opportunity for one firm and a threat for another.
  5. Test an idea with the target customers and real actions such as paying; patents, trademarks, copyrights and trade secrets protect different things.
  6. Vision is the future, mission is what you do now and for whom, and SMART goals are specific, measurable, achievable, relevant and time-bound.
  7. Legal is not the same as ethical. Span of control is direct reports; just-in-time inventory saves storage cost but risks running out.