Welcome to unit 1 video 9. Deciding on a type of startup. When entrepreneurs think of creating a start up, they must decide what kind of business it will be. In this video, we will explore three types of business organizations, for-profit, non-profit, and hybrid. We will also learn the difference between a company and a corporation. The term for-profit can be a noun or an adjective. That means we can say that a business is a for-profit, where for-profit is used as a noun. Or we can say, that is a for-profit business, where for-profit is used as an adjective. The primary or most important goal of a for-profit business is making money. Most businesses are for-profit, some common examples are restaurants, stores, and manufacturers. The term non-profit can be also be a noun or an adjective. The primary goal of a non-profit is helping the community. Making money is also important for non-profits, because money is needed to support the operation and employees. But the goal of making money is secondary, or less important, than the primary goal. For example, the United Nations Children's Fund has a primary goal of helping children. Its secondary goal is making money through donations. The United Nations Children's Fund needs this money to help the children. But also to pay for employees, offices, and other expenses. Not for profit is a newer term that is sometimes used to describe non-profit organizations. Not for profit has a more general meaning than non-profit. The term not for profit includes three types of organizations. Non-profits, charities, and NGO's which are Non Governmental Organizations. That means we can say that a non-profit is a type of not for profit. Doctors Without Borders and The American Red Cross are some examples of non-profits. For each of these organizations the primary goal is to help local and global communities. Like not for profit, the term hybrid organization is also relatively new. Currently hybrid is mainly used as an adjective to describe the nouns organization or social venture. A hybrid organization is a combination of a for-profit and a non-profit. This means that the organization has two equally important primary goals. To make money, and to help local or global communities. Another common term for a hybrid organization, is a social enterprise. And entrepreneurs, who start hybrid organizations, or social enterprises, are often called, social entrepreneurs. Let's look at an example. Three avocados is a social enterprise that sells coffee and uses all of its profits to provide clean water and education in Uganda. Their for-profit goal is to make money by selling coffee. Their non-profit goal is to provide clean water and education in Uganda. Because both goals are equally important, this is a good example of a hybrid, or mixed, organization. This third type of organization is becoming more popular around the world, but, because it is so new, social entrepreneurs may have difficulty attracting funding. Countries often have laws and regulations or rules about creating new businesses. When an entrepreneur chooses a type of business for a start-up he or she has to understand and follow the laws and regulations. But, those laws and regulations are not the same in every country and can be very difficult to understand. Therefore, we will not review any specific laws or regulations in this course. One thing that is the same across all countries is the difference between a company and a corporation. Our guest speaker, professor Philip Nichols of the Wharton School of Business at the University of Pennsylvania will explain. His video will be followed by a brief comprehension check. When entrepreneurs create their startups they must choose one of three types of businesses. A for-profit, a non-profit, or a hybrid organization. Different countries have different laws and regulations for starting a new business. But all countries agree on the difference between a company and a corporation.