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This document delves into the intricate relationship between profit and risk in the context of entrepreneurship. It explores key concepts such as pestel analysis, profit calculation, and risk management, providing insights into the factors that influence business success. The document also examines the importance of the trade-off between risk and return, highlighting the need for careful decision-making in investment opportunities. Additionally, it discusses the concept of standards of living and its assessment, providing a framework for understanding the broader economic and social context of entrepreneurship.
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1. Political. Politics, specific industries and occupations within that politics can be influenced or affected by the government. It could include Political stability, trade restrictions, labor legislation, environmental law and tax policy. Politics may also affect the provision of both merit goods—those that the government wants to supply—and opposition to merit goods— those that the government does not want to offer (demerit goods or merit bads). Governments also have a significant impact on a country's infrastructure, education, and health. 2. Economic Economic factors will have a direct impact on businesses, affecting product pricing and consumers' purchasing ability. Rates like inflation, interest rates, exchange rates, and unemployment rates are included in this category. 3. Social Typically, economic aspects are easier to measure than social ones. Cultural aspects, health consciousness, demographic considerations, age distribution, career views, and customer perceptions are examples of social influences. 4. Technological Imagine 1. Libertarian, gerrymandering (Sepulveda, 2020) Imagine 2. Economic Growth (May 6th, 2021) (Babydov, 2021) Imagine 3. Social (Konoplev, 2022)
Technology is evolving very quickly. As a result, this is one of the most challenging regions to anticipate. It is important that management teams and analysts keep abreast of potential technology effects on an industry or business. Some of them are: Automation. The potential effects of research and development (R&D) on prices. Competitiveness technological foundation (like 5G, IoT, etc….) Internet safety.
5. Environment Environmental variables have an equal role. Because firms may face significant risks and opportunities as a result of climate change. Environmental considerations include, for instance: Carbon dioxide output. Climate change. Severe weather events are becoming more frequent. Managing natural resources. 6. Legal The economy as a whole, certain industries, or even single enterprises within a sector can be impacted by legal considerations. Both of these perspectives are taken into account by legal considerations, which then design methods in accordance with these rules. For example: Industry guidelines. Necessary licenses and permits to operate. IP protection (Intellectual Property). Consumer protection legislation, safety requirements, labor laws, etc…
Imagine 4. Technological (MAAS Team, 2022) Imagine 5. Environment (Behance, 2022) Imagine 6. Legal (Nhanlucnganhluat, 2022)
‘’How to increase profits?” Increasing profits by increasing the selling price of products when considering the unbalanced cost factors. Increasing profits through reducing manpower when the number of workers exceeds the demand for product production. 1.2. Business risks. Along with the relationship of profit and risk, the risk factor also plays an important role that businesses are interested in. Risk is the possibility of unexpected investment results of an organization or enterprise. Or it can be understood that risk is the ability to make the actual return in the future different from the expected return, calculated at the time of making an investment. It can be understood that in business, the higher the risk, the higher the efficiency. Causes of risks in business operations, including Businesses make wrong calculations and decisions that make business performance no longer guaranteed. The tastes of customers change quickly and unexpectedly, making businesses unable to keep up. Products used by enterprises for business are not guaranteed in quality. Increasing costs make businesses unable to meet the prices that customers want, … Principle of risk and return trade-off is very important. The higher the risk of an investment, the greater the return that investors expect, expect to receive from that investment, and vice versa. Image 1.1b. How to increase profits? (Profit and risk, 2021) Image 1.2c. Risk in business (Riskinbusiness, 2022)
Applying the principle of the trade-off between risk and profit in corporate governance requires financiers to master the following two basic issues: If two investment opportunities have the same expected rate of return, the firm should choose the investment opportunity with the lower risk. If two investment opportunities have the same level of risk, the firm should choose the investment opportunity with the higher expected rate of return.
A survey conducted in April 2022, found that only 17 percent of Turkish respondents expected their standard of living to rise in the coming year. The high inflation in the country has contributed to 61 percent of respondents predicting that their living standards will fall significantly in the coming year. Moreover, Chinese people's quality of life is also decreasing.
The yearly per capita disposable income of rural Chinese families in 2021 was nearly 18, yuan or about 40% of urban households' income. Despite the growth of millionaires in China, the majority of its citizens continue to live in substandard housing. The pronounced wealth disparity between the elite and poor in China has developed into a societal issue. Table 2.2b. China from 1990 to 2021 (C.Textor, 2022)
3.1.1. Definition Business means the activities of investment, production, purchase, sale and provision of services conducted independently by business entities, often for the sake of making a profit. A stakeholder is anyone who can benefit or lose from a company's policies and activities, and the company needs to address their concerns. This includes customers, employees, shareholders, suppliers, distributors (retailers), bankers, people in surrounding communities, the media, environmentalists, competitors, unions, critics and elected government leaders. 3.1.2. What are the signs of business activity? Professional, professionally and regularly. This activity provides the main source of income for the person who performs them. Carried out independently. Subjects decide all matters on their own behalf and take responsibility for their own activities. Aimed at making regular profits. 3.1.3. What types of business are there? Business Services: This is probably the most common type of business today. Accordingly, in the market, there are many businesses that are applying this type because it does not distinguish between industries, field occupations. There are some popular service business areas such as: counsel, finance, supply chain and distribution. Production Business: In addition to the service business, the production business is also a popular form of business. For any commodity product, production is the stage has the most important role, serving the process of exchanging and buying and selling on the market. Retail Business: This is also a form of directly bringing products, goods, services…from suppliers, producers to consumers. There are many retails business models available. 3.1.4. What are the characteristics of business? Image 3.1.1d. Businesses and Stakeholders (VirtusLaw, 2019)
3.2.2. Requirements to be recognized as a nonprofit organization?
1 Nguyễn Bảo Trâm_22DH 2 Đinh Trần Yến Nhi_22DH 2 Đặng Đào Thùy Vân_22DH LIST OF FIGURES Imagine 1. Libertarian, gerrymandering............................................................................................................ 4 Imagine 2. Economic Growth (May 6th, 2021)................................................................................................. 4 Imagine 3. Social (Konoplev, 2022).................................................................................................................. 4 Imagine 4. Technological (MAAS Team, 2022)................................................................................................ 5 Imagine 5. Environment (Behance, 2022)......................................................................................................... 5 Imagine 6. Legal (Nhanlucnganhluat, 2022)...................................................................................................... 5 Image 1.1a. Profit in business (Grabowska), 2022).......................................................................................... 6 Image 1.1b. How to increase profits? (Profit and risk, 2021)............................................................................ 7 Image 1.2c. Risk in business (Riskinbusiness, 2022)........................................................................................ 7 Image 3.1.1d. Businesses and Stakeholders (VirtusLaw, 2019)...................................................................... 11 Image 3.2.1e. Nonprofit organization (ThaiLandTranslation, 2010).............................................................. 12 Table 2.2a. Turkish living standards (ZeynepDierks, 2022).............................................................................. 9 Table 2.2b. China from 1990 to 2021 (C.Textor, 2022).................................................................................. 10 REFERENCES Babydov, I. (2021, 5 6). pexels. Retrieved from pexels: https://www.pexels.com/vi-vn/anh/internet-kinh- doanh-th-tr-ng-ti-n-b-c-7788009/ Behance. (2022, 12 1). behance. Retrieved from behance: https://www.behance.net/gallery/82703401/BOSCH-Creative-Ads C.Textor, 2. (2022, 3 21). statista. Retrieved from statista: https://www.statista.com/statistics/259451/annual-per-capita-disposable-income-of-rural-and- urban-households-in-china/ DileepRao. (2017). forbes. Retrieved from forbes: https://www.forbes.com/sites/dileeprao/2020/03/06/the-1-skill-of-entrepreneurial-geniuses- from-sam-walton-to-mark-zuckerberg/?sh=d50cd714b95a Grabowska), P. (. (2022, 6 23). pexels. Retrieved from pexels: https://www.pexels.com/vi-vn/anh/di-n-tho- i-thong-minh-ban-vo-danh-tr-ng-bay-4386292/ Konoplev, V. (2022, 5 19). pexels. Retrieved from pexels: https://www.pexels.com/vi-vn/anh/den-va-tr-ng- thanh-ph-d-ng-ph-dam-dong-12179240/
