Entrepreneurship Owning Your Future Eleventh Edition Steve Mariotti Founder, Network for Teaching Entrepreneurship With Tony Towle Edited by Neelam Patel Prentice Hall Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editor in Chief: Vernon R. Anthony Acquisitions Editor: Gary Bauer Editorial Assistant: Megan Heintz Director of Marketing: David Gesell Campaign Marketing Manager: Leigh Ann Sims School Marketing Manager: Laura Cutone Senior Operations Supervisor: Pat Tonneman Text and Cover Designer: Amy Rosen Manager, Visual Research: Beth Brenzel Photo Researcher: Pamela Ross Manager, Rights and Permissions, Image Resource Center: Zina Arabia Image Permission Coordinator: Vicki Menanteaux Cover Art: Jose Luis Pelaez/Blend Images/Jupiter Images Content Reviewer: Rupa Mohan Full-Service Project Management: Gleason Group, Inc., Norwalk, CT Composition: PDS Associates, Ocean Township, NJ Printer/Binder: R.R. Donnelley & Sons Company/ Willard Cover Printer: Lehigh-Phoenix Color Text Font: ITC Galliard Std This book is dedicated to: Raymond Chambers; Landon Hilliard; Elizabeth, Charles G., and David H. Koch; James Lyle; and the Honor- able John C. Whitehead Special dedication to: Diana Davis Spencer, Art Samberg, Mary Myers Kauppila, and the late Bernard A. Goldhirsh Entrepreneurship: Owning Your Future is the 11th edition of this textbook. The 10th edition was titled How to Start & Operate a Small Business. The Network for Teaching Entrepreneurship was previously named the National Foundation for Teaching Entrepreneurship. Copyright © 2010 NFTE (Network for Teaching Entrepreneurship), 120 Wall St., 29th Floor, New York, NY 10005 and published by Pearson Education, Inc., 1 Lake St., Upper Saddle River, New Jersey 07458. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from NFTE prior to any prohibited reproduction, storage in a retrieval sys- tem, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to NFTE (Network for Teaching Entrepreneurship), Permissions Department, 120 Wall St., 29th Floor, New York, NY 10005. Many of the designations by manufacturers and seller to distinguish their products are claimed as trademarks. Where those designations appear in this book, and the publisher was aware of a trademark claim, the designa- tions have been printed in initial caps or all caps. 10 9 8 7 6 5 4 3 2 1 Prentice Hall is an imprint of ISBN 10: 0-13-512844-7 www.pearsonhighered.com ISBN 13: 978-0-13-512844-2 Reviewers iii REVIEWERS RICHARD ADAMO Independence High School New York, NY STACEY ALDERMAN Carroll County High School Hillsville, VA ANN CARRANZA Miami Southridge Senior High School Miami, FL JAMES G. HAWKINS North East High School Kansas City, MO MICHAEL IACARELLA Thomas Alva Edison High School N.E. Minneapolis, MN GWEN KASSEP Mt. Lebanon High School Pittsburgh, PA DEB MOORE Sunrise Mountain High School Peoria, AZ CONNIE MORAN Ariel Community Academy Chicago, IL ANGELA POWELL H. Grady Spruce High School Dallas, TX SUSI PRICE Dixon High School Holly Ridge, NC BLAIR SAWYERS Western International High School Detroit, MI MONICA SMALLS Brighton High School Brighton, MA SCOTT STEWARD Gwendolyn Brooks College Preparatory Academy Chicago, IL KENE TURNER EpiLife Consulting New York, NY ROBINETTA WEST Bowsher High School Toledo, OH EDWARD YOUNGBLOOD Silver Creek High School San Jose, CA iv About the Authors ABOUT THE AUTHORS Steve Mariotti Steve Mariotti, founder of the Network for Teaching Entrepreneurship (NFTE), is an expert in education for at-risk youth He has been helping young people develop marketable skills by learning about entrepre- neurship for more than 25 years. Steve received an M.B.A. from the University of Michigan, Ann Arbor, and has studied at Harvard University, Stanford University, and Brooklyn College. His professional career began as a Treasury Analyst for Ford Venezuela, Mexico, Caribbean, Argentina, Peru, Chile, South Africa, and the Export Division (1976–1979). He introduced financial systems that saved the company over $5 million per annum via interest-expense reduction and improved cash man- agement. After leaving Ford, Steve founded—and for the next three years operated—Mason Import/ Export Services in New York, eventually acting as sales representative and purchasing agent for 32 over- seas firms. In 1982, Steve made a momentous career change and became a Special Education/Business Teacher in the New York City school system, choosing to teach in such at-risk neighborhoods as Bedford-Stuyvesant in Brooklyn and the “Fort Apache” section of the South Bronx. It was at Jane Addams Vocational High School in the Bronx that Steve had the idea of bring- ing entrepreneurial education to low-income youth. This inspiration led to the founding of the National Foundation for Teaching Entrepreneurship in 1987 (now the Network for Teaching Entrepreneurship), with 501(c)(3) nonprofit status granted by the IRS the following year. Steve Mariotti and NFTE have received numer- ous awards—including the 2004 Ernst & Young National Entrepreneur of the Year Award, the Golden Lamp Award from the Association of Education Publishers (2002), and the National Federation of Independent Businesses—Best Business Teacher 1988—as well as major media exposure that includes pieces in the New York Times and other prominent publications and profiles on ABC News and CNN. Steve has coauthored some two dozen books and educational manuals that have sold a total of over half a million copies. Tony Towle Tony Towle has worked with Steve Mariotti and NFTE since its inception. In addition, he has writ- ten about art, and is a poet whose books include A History of the Invitation (New & Selected Poems 1963–2000), Memoir 1960–1963, and most recently, Winter Journey. He has received a National Endow- ment for the Arts Fellowship and a New York State Council on the Arts Fellowship, among other prizes and awards. Neelam Patel Neelam Patel joined NFTE in 2006 with over 10 years of experience in the field of education, profes- sional development, and curriculum design. Neelam’s current responsibilities at NFTE include creating text- and digital-based entrepreneurship curricula, managing the unit responsible for supporting and creating NFTE’s program elements, and providing the organization with short- and long-term program- matic strategic goals. She oversees NFTE’s curricu- lum design, teacher professional development, alumni services, and research initiatives. Prior to coming to NFTE, Neelam taught in pub- lic schools within the Los Angeles Unified School District and the New York City Board of Education. In addition, she has been an instructor and supervi- sor for Education students in the Master’s programs at Mercy College and at Teachers College, Columbia University. Neelam has a B.A. from the University of South- ern California, and an M.S. in Educational Leader- ship from Pepperdine, and is currently pursuing a doctoral degree at Teachers College, Columbia Uni- versity, in Curriculum Studies. She is also a 2003 National Board Certified Teacher. “NFTE’s vision is that every young person will find a pathway to prosperity.” The NFTE Story v THE NFTE STORY The NFTE Story From one program in the Bronx, NFTE has expanded its mission into an international movement for teach- ing entrepreneurship, academic, and technology skills to young people worldwide, and has been recognized with many awards and honors. So, too, has NFTE founder Steve Mariotti, who has been consistently recognized for his leadership and contributions to the nation’s youth. Although still an emerging curricu- lum, entrepreneurship education has enjoyed tremen- dous growth in acceptance by K–12 educators and in popularity among young adults. NFTE believes that entrepreneurship could and should be added to school programs nationwide. To fulfill its mission, NFTE focuses on four goals: ⦁ Engage young people in school by teaching math, reading, writing, and communication within the motivating context of starting and operating a small business. ⦁ Teach young people about the market economy and how ownership leads to wealth creation. ⦁ Encourage an entrepreneurial mindset so young people can succeed whether they pur- sue higher education, enter the workforce, or become entrepreneurs. ⦁ Make young people financially literate so they are able to save and invest to meet their life goals. NFTE is widely viewed as a world leader in promot- ing entrepreneurial literacy—helping youth achieve greater academic, personal, professional, and financial success. Nearly 50,000 young people will participate in NFTE programs in the 2008–2009 school year. Through a growing network of influential partners and affiliated organizations, NFTE is leading the way in expanding the field of youth entrepreneurship education. Relationships of note include World Eco- nomic Forum, Aspen Institute, Council on Foreign Relations, New York Economics Club, Philanthropy Roundtable, Ewing Marion Kauffman Foundation, John Templeton Foundation, Atlantic Philanthro- pies, McKinsey & Co., and many top institutions of higher learning, including Harvard, Yale, Columbia, Stanford, and Babson College. Working in partnership with schools, community- based organizations, and teachers, NFTE impacts students’ basic academic and life skills through a hands-on entrepreneurship curriculum that reinforces math, reading, and writing, and develops skills in critical thinking, teamwork, communication, and decision-making. NFTE programs are taught in a variety of set- tings, including public schools, community-based organizations, and summer BizCamps, and range from 20 to 100 hours. The NFTE program empha- sizes learning by doing. Experiential learning activi- ties include visiting local wholesale districts or dis- count stores, attending selling events, interacting with local entrepreneurs, and participating in a business plan competition, usually judged by outside profes- sionals. NFTE classes may be offered as stand-alone entrepreneurship programs or infused into econom- ics, math, or other relevant subjects. All programs consistently emphasize the connec- tions between personal motivation, succeeding in the real world, and personal and financial independence. Equally important, NFTE teaches young people to think like entrepreneurs: to take risks, to be open to learning, and to be empowered to own their futures. ACKNOWLEDGMENTS vi Acknowledgments This book would not have been possible without the contributions of many people. First I would like to thank my writing partner, Tony Towle, who from NFTE’s very beginning has helped me organize my thoughts and experiences. I would also like to thank Neelam Patel, without whose talent and expertise this eleventh edition would not have been possible. I must single out the help of two outstand- ing NFTE executives, Rupa Mohan and Daniel Rabuzzi, whose leadership and insights are deeply appreciated. In addition, I would like to acknowl- edge the efforts of additional NFTE executives Darlene Ajayi, Luke Anderson, Cathy Blanchard, Del Daniels, Gary Giscombe, Julie Kantor, Erin Koblitz, Deidre Lee, Clare McCully, Estelle Reyes, Nicole Rottino, Victor Salama, Laura Scarlett, Keri Teplitzky, Jane Walsh, and Katerina Zacharia. Special thanks to Jerry Gleason at Gleason Group, Inc., for helping NFTE put together this extremely complex project. Also, thanks to Gary Bauer, Vernon Anthony, Robin Baliszewski, Leigh Ann Sims, and the entire team at Pearson Prentice Hall for their professionalism and support. Special thanks to Amy Rosen, whom NFTE is thrilled to have as our new president and CEO. She is sure to take NFTE to a new level of success. In addition, I would like to recognize the efforts and contributions of members of NFTE’s National Board of Directors: Albert Abney, Patricia Alper, Bill Daugherty, Phillip A. Falcone, Michael L. Fetters, Lawrence N. Fields, Donald Friedman, Thomas P. Hartocollis, Landon Hilliard, Sanford Krieger, James Lyle, Consuelo Mack, Alan Patricof, Marsha Ralls, Donna Redel, Robert Reffkin, Arthur J. Samberg, Diana Davis Spencer, Peter B. Walker, and Tucker York. I would like to acknowledge the inspired guidance provided by our National Executive Committee: Bart Breighner, Steven Brenninkmeijer, Kathryn Davis, Lewis M. Eisenberg, Theodore J. Forstmann, Sir Paul Judge, Mary Myers Kauppila, the late Hon. Jack Kemp, Elizabeth B. Koch, Abby Moffat, Jeffrey S. Raikes, Kenneth I. Starr, and the Hon. John C. Whitehead. I am deeply grateful as well to the many phi- lanthropists who have supported our work, includ- ing Raymond Chambers, Charles G. and David H. Koch, Joanne Beyer of the Scaife Family Foundation, Barbara Bell Coleman of the Newark Boys’ and Girls’ Clubs, Chris Podoll of the William Zimmerman Foundation, Stephanie Bell-Rose of the Goldman Sachs Foundation, The Shelby Cullom Davis Foundation, Jeff Raikes and the Microsoft Corporation, The Nasdaq Educational Foundation, and Ronald McDonald House Children’s Charities. Further, I would like to acknowledge Deidre Lee, Essye Klempner, Curtis DeBerg, John Harris, Erika Humphrey, Deborah Reinerio, Karl Boedecker, Steve Alcock, Harsh and Aruna Bhargava, Lena Bondue, Dawn Bowlus, Shelly Chenoweth, Janet McKinstry Cort, Erik Dauwen, Clara Del Villar, Christine Chambers Gilfillan, Kathleen Kirkwood, Michael Simmons, Sheena Lindahl, Cynthia Miree, Henry To, Carol Tully, Dilia Wood, and Elizabeth Wright, as well as Peter Cowie, Joseph Dominic, Paul DeF. Hicks, Jr., Ann Mahoney, David Roodberg, Phyllis Ross Schless, and Remi Vermeir, who have contributed countless insights into providing entrepreneurial opportuni- ties to young people. Thanks are due to all of the teachers, students, experts, and friends who were kind enough to look over this book and help me improve it. In addition, I would like to thank my brother, Jack, the best CPA I know, and my father, John, for financing much of NFTE’s early work, and for their continuing love and guidance. Finally, I want to thank my mother, Nancy, a wonderful special education instructor who showed me that one great teacher can affect eternity. — Steve Mariotti Brief Contents vii BRIEF TABLE OF CONTENTS UNIT 1: What Is an Entrepreneur? ................................................................ 2 Chapter 1: Introduction to Entrepreneurship ................................................................. 4 Chapter 2: Entrepreneurship & the Economy .............................................................. 26 Chapter 3: Types of Businesses & Business Ownership ................................................. 50 Case Study 1: Becoming an Entrepreneur ......................................................................... 70 UNIT 2: Preparing for Business ................................................................... 72 Chapter 4: Business Communication ........................................................................... 74 Chapter 5: Ethics & Social Responsibility .................................................................. 104 Case Study 2: Communicating Effectively & Responsibly ............................................... 134 UNIT 3: Opportunity Recognition & Market Analysis ............................... 136 Chapter 6: Opportunity Recognition ......................................................................... 138 Chapter 7: Market Research ....................................................................................... 166 Case Study 3: Starting a New Business ........................................................................... 192 : Business Plan for Eva’s Edibles ................................................................. 194 UNIT 4: Marketing Plan & Sales ............................................................... 208 Chapter 8: Marketing Your Product ............................................................................210 Chapter 9: Selling Your Product ................................................................................ 238 Case Study 4: Marketing & Selling .................................................................................264 UNIT 5: Analyzing Finances ...................................................................... 266 Chapter 10: Business Decisions & the Economics of One Unit .................................... 268 Chapter 11: Financial Statements ................................................................................. 288 Chapter 12: Financial Ratios & Break-Even Analysis .................................................... 320 Case Study 5: Analyzing the First Year ...........................................................................342 UNIT 6: Starting Your Business ................................................................. 344 Chapter 13: Financing Your Business ...........................................................................346 Chapter 14: Recordkeeping & Accounting ................................................................... 370 Chapter 15: Staffing Your Business ..............................................................................404 Chapter 16: Protecting Your Business .......................................................................... 432 Chapter 17: Taxes & Government Regulations ............................................................ 458 Case Study 6: Building the Business ............................................................................... 486 UNIT 7: Managing Your Business .............................................................. 488 Chapter 18: What Is Management? .............................................................................. 490 Chapter 19: Managing Production, Distribution, & Operations ....................................510 Chapter 20: Managing Purchasing & Inventory ........................................................... 532 Case Study 7: Managing for Success ............................................................................... 554 UNIT 8: Growing Your Business ................................................................ 556 Chapter 21: Making Your Business Grow .................................................................... 558 Chapter 22: Franchising & Exit Strategies ....................................................................576 Case Study 8: Exiting the Business .................................................................................604 viii Table of Contents TABLE OF CONTENTS UNIT 1 WHAT IS AN ENTREPRENEUR? ..................................................2 Chapter 1 Introduction to Entrepreneurship .................................. 4 SECTION 1.1: What Is Entrepreneurship? ........................................................... 5 Entrepreneurship Issues: Serial Entrepreneurship ............................................... 9 SECTION 1.2: Characteristics of an Entrepreneur ..............................................13 Your Business Career: Choosing to Attend College ...........................................18 Entrepreneur Profile: Entrepreneurial Skills for Whatever You Do ......................21 REVIEW AND ASSESSMENT ........................................................................... 22 Entrepreneurs & Technology: The Internet and the World Wide Web .................. 25 Chapter 2 Entrepreneurship & the Economy ............................... 26 SECTION 2.1: Importance of Entrepreneurship in the Economy ......................... 27 Your Business Career: Self-Awareness .............................................................31 SECTION 2.2: Thinking Globally, Acting Locally ............................................... 39 Entrepreneurship Issues: Alumni Networks ..................................................... 40 Entrepreneur Profile: Nonprofit versus Profit ................................................... 45 REVIEW AND ASSESSMENT ........................................................................... 46 Entrepreneurs & Technology: Information Technology ......................................... 49 Chapter 3 Types of Business & Business Ownership.................... 50 SECTION 3.1: Types of Business .......................................................................51 Your Business Career: Career Orientation ...................................................... 53 SECTION 3.2: Types of Business Ownership .................................................... 56 Entrepreneurship Issues: Employee-Owned Corporations ................................ 59 Entrepreneur Profile: Flying into Business ........................................................ 65 REVIEW AND ASSESSMENT ........................................................................... 66 Entrepreneurs & Technology: E-Commerce ........................................................ 69 Case Study 1 Becoming an Entrepreneur ............................................................. 70 Table of Contents ix UNIT 2 PREPARING FOR BUSINESS .....................................................72 Chapter 4 Business Communication ............................................74 SECTION 4.1: Communicating in Business ........................................................ 75 Entrepreneurship Issues: Web Conferencing ................................................... 82 SECTION 4.2: Negotiating .............................................................................. 87 Your Business Career: Expectations ............................................................... 92 Entrepreneur Profile: Spreading the Word! .................................................... 97 REVIEW AND ASSESSMENT ........................................................................... 98 Entrepreneurs & Technology: Competing Online ...............................................101 Time Management ........................................................................................ 102 Chapter 5 Ethics & Social Responsibility ....................................104 SECTION 5.1: Ethical Business Behavior ..........................................................105 Your Business Career: Empathy .................................................................... 112 SECTION 5.2: Socially Responsible Business & Philanthropy ............................115 Entrepreneurship Issues: Peace through Entrepreneurship ...............................122 Entrepreneur Profile: Giving Back: We Lend A Hand .....................................127 REVIEW AND ASSESSMENT ..........................................................................128 Entrepreneurs & Technology: E-Mail ................................................................131 Goal Setting ................................................................................................. 132 Case Study 2 Communicating Effectively & Responsibly ............134 x Table of Contents TABLE OF CONTENTS UNIT 3 OPPORTUNITY RECOGNITION & MARKET ANALYSIS ............. 136 Chapter 6 Opportunity Recognition ...........................................138 SECTION 6.1: What Is a Business Plan? ..........................................................139 Entrepreneurship Issues: Elevator Pitches .......................................................146 SECTION 6.2: What Is a Business Opportunity? .............................................147 Your Business Career: Respect ......................................................................151 Entrepreneur Profile: Challenges of Being a Student Entrepreneur ...................161 REVIEW AND ASSESSMENT ..........................................................................162 Entrepreneurs & Technology: Web Design .......................................................165 Chapter 7 Market Research ......................................................166 SECTION 7.1: What Is Market Research? ........................................................167 Entrepreneurship Issues: Focus Groups ......................................................... 174 SECTION 7.2: What Is Your Competitive Advantage? ......................................177 Your Business Career: Teamwork ..................................................................184 Entrepreneur Profile: It’s All in the Details ......................................................187 REVIEW AND ASSESSMENT ..........................................................................188 Entrepreneurs & Technology: Web Domains .....................................................191 Case Study 3 Starting a New Business .....................................192 Business Plan for Eva’s Edibles ............................194 Table of Contents xi UNIT 4 MARKETING PLAN & SALES .................................................208 Chapter 8 Marketing Your Product ...........................................210 SECTION 8.1: Developing Your Marketing Mix ...............................................211 Entrepreneurship Issues: Local Business Cooperatives .....................................214 SECTION 8.2: Promoting Your Product .......................................................... 223 Your Business Career: Networking............................................................... 228 Entrepreneur Profile: A New Spin on Biking ................................................. 233 REVIEW AND ASSESSMENT ......................................................................... 234 Entrepreneurs & Technology: Website Branding ................................................237 Chapter 9 Selling Your Product................................................ 238 SECTION 9.1: Principles of Successful Selling ................................................. 239 Entrepreneurship Issues: Customer Word-of-Mouth ....................................... 243 SECTION 9.2: Estimating Sales ...................................................................... 249 Your Business Career: Dressing for Success .................................................. 253 Entrepreneur Profile: E-Media Mogul ........................................................... 259 REVIEW AND ASSESSMENT ......................................................................... 260 Entrepreneurs & Technology: Web Hosts ......................................................... 263 Case Study 4 Marketing & Selling .......................................... 264 xii Table of Contents TABLE OF CONTENTS UNIT 5 ANALYZING FINANCES ........................................................266 Chapter 10 Business Decisions & the Economics of One Unit ....... 268 SECTION 10.1: The Cost of Doing Business ..................................................... 269 Your Business Career: Self-Esteem ................................................................271 Entrepreneurship Issues: Carbon Credits ...................................................... 272 SECTION 10.2: The Economics of One Unit of Sale ..........................................275 Entrepreneur Profile: The “Write” Business ................................................... 283 REVIEW AND ASSESSMENT .......................................................................... 284 Entrepreneurs & Technology: Web Content .......................................................287 Chapter 11 Financial Statements ............................................... 288 SECTION 11.1: Income Statements & Cash Flow .............................................. 289 Entrepreneurship Issues: Nonprofits ..............................................................291 SECTION 11.2: The Balance Sheet .................................................................. 304 Your Business Career: Responsibility ............................................................ 309 Entrepreneur Profile: Konspiracy Studios: Cash In, Cash Out ..........................315 REVIEW AND ASSESSMENT ...........................................................................316 Entrepreneurs & Technology: Networks ............................................................319 Chapter 12 Financial Ratios & Break-Even Analysis .................... 320 SECTION 12.1: Financial Ratios .......................................................................321 Entrepreneurship Issues: Entrepreneurship Blogs ........................................... 324 SECTION 12.2: Break-Even Analysis ............................................................... 333 Your Business Career: Positive Attitude ......................................................... 334 Entrepreneur Profile: Relationship Building: The Art of Success ........................337 REVIEW AND ASSESSMENT .......................................................................... 338 Entrepreneurs & Technology: Internet Security ...................................................341 Case Study 5 Analyzing the First Year ............................................................... 342 Table of Contents xiii UNIT 6 STARTING YOUR BUSINESS ..................................................344 Chapter 13 Financing Your Business .......................................... 346 SECTION 13.1: Start-Up Investment ................................................................ 347 Your Business Career: Resiliency ...................................................................351 SECTION 13.2: Obtaining Financing ............................................................... 355 Entrepreneurship Issues: Micro-Loans ...........................................................361 Entrepreneur Profile: All Aboard! ................................................................ 365 REVIEW AND ASSESSMENT .......................................................................... 366 Entrepreneurs & Technology: Search Engine Optimization ..................................369 Chapter 14 Recordkeeping & Accounting ....................................370 SECTION 14.1: Recordkeeping ........................................................................371 Entrepreneurship Issues: Paperless Offices ....................................................375 Your Business Career: Sense of Purpose ....................................................... 382 SECTION 14.2: Accounting Systems ............................................................... 384 Entrepreneur Profile: Do, Re, Mi: Piano Lessons with a Twist .......................... 399 REVIEW AND ASSESSMENT .......................................................................... 400 Entrepreneurs & Technology: Online Finance .................................................... 403 Chapter 15 Staffing Your Business ............................................. 404 SECTION 15.1: Hiring Decisions ..................................................................... 405 Entrepreneurship Issues: Staffing ..................................................................412 SECTION 15.2: Training & Motivating Employees .............................................416 Your Business Career: Comfort with Diversity ................................................ 425 Entrepreneur Profile: The Tattoo Team: Henoo ...............................................427 REVIEW AND ASSESSMENT .......................................................................... 428 Entrepreneurs & Technology: Internet Promotion ................................................431 xiv Table of Contents TABLE OF CONTENTS Chapter 16 Protecting Your Business .......................................... 432 SECTION 16.1: Legal Issues ............................................................................ 433 Entrepreneurship Issues: Federal Funding for Startups ................................... 437 SECTION 16.2: Insurance............................................................................... 443 Your Business Career: Honesty .................................................................... 448 Entrepreneur Profile: Singing Like a Pro! ...................................................... 453 REVIEW AND ASSESSMENT .......................................................................... 454 Entrepreneurs & Technology: Internet Networking ............................................. 457 Chapter 17 Taxes & Government Regulations ............................ 458 SECTION 17.1: Taxes & Your Business ............................................................. 459 Your Business Career: Self-Control ............................................................... 468 SECTION 17.2: Government Regulations ..........................................................471 Entrepreneurship Issues: Socially Responsible Investing ...................................475 Entrepreneur Profile: Bling-Bling Discount Fashion Jewelry ..............................481 REVIEW AND ASSESSMENT .......................................................................... 482 Entrepreneurs & Technology: Generating Leads ................................................ 485 Case Study 6 Building the Business ......................................... 486