8 Business Organizations

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8 Business Organizations

  1. 1. OBJECTIVE: ANALYZE THE STRUCTURE OF COMMON BUSINESS MODELS FOUND IN A FREE MARKET SYSTEM Business Organizations
  2. 2. Entrepreneur <ul><li>Is a person who owns a business </li></ul><ul><li>Owning a business involves a large risk </li></ul><ul><li>Most businesses fail within three years </li></ul><ul><li>Small Business Administration- is a federal agency design to help you start your business </li></ul>
  3. 3. Elements of Business Operation <ul><li>Expenses- new equipment, wages, insurance, taxes, electricity, telephone, and inventory </li></ul><ul><li>Advertising- you need to get the word out your in business </li></ul><ul><li>Record Keeping- Paperwork, receipts, invoices, tax forms, </li></ul><ul><li>Risk- Every business risks failure, you must measure the risk against the reward </li></ul>
  4. 4. Sole Proprietorships <ul><li>Is the most common in the U.S. </li></ul><ul><li>This type of business is run by one person </li></ul><ul><li>They get all the money and the risk </li></ul><ul><li>Biggest disadvantage is that the proprietor has unlimited liability </li></ul>
  5. 5. Partnerships <ul><li>Is run by two or more people </li></ul><ul><li>They share equally in the business </li></ul><ul><li>One in ten businesses in the U.S. are Partnerships </li></ul><ul><li>If the business borrows money all owners share the debt </li></ul><ul><li>Biggest disadvantage, has unlimited liability </li></ul>
  6. 6. Other Types of Partnerships <ul><li>Limited Partnership- Is when one person makes all the decisions and the other has no say and only invests in the business </li></ul><ul><li>Investor’s liability is limited to what is invested </li></ul><ul><li>Joint Venture- A partnership set up for a short time and with a specific purpose </li></ul>
  7. 7. Corporations <ul><li>Corporations are own by stockholders </li></ul><ul><li>Stockholders buy into the company by purchasing stock </li></ul><ul><li>Stockholders do not run the business </li></ul><ul><li>By law corporations are treated like a person </li></ul><ul><li>Your risk is limited to the money you invest </li></ul><ul><li>Two in ten businesses are corporations </li></ul>
  8. 8. Corporations <ul><li>To raise money corporations sell stocks </li></ul><ul><li>Common stock- gives investors part ownership and voting rights </li></ul><ul><li>Preferred Stock- do not have voting rights but is guaranteed a certain amount of dividend each year </li></ul><ul><li>A board of directors- is responsible for supervising and controlling the corporation </li></ul>
  9. 9. Franchises <ul><li>A franchise is a contract in which the franchiser sells to another business the right to use its name and sell its products </li></ul>
  10. 10. Review <ul><li>What is a Entrepreneur? </li></ul><ul><li>Ans. Is a person who owns or starts a business </li></ul><ul><li>What is a Sole Proprietorships? </li></ul><ul><li>Ans. Is a business run by one person </li></ul><ul><li>Name all the different types of partnerships? </li></ul><ul><li>Ans. Partnership, Limited Partnership, and Joint Venture </li></ul><ul><li>Who is Adam Smith? </li></ul><ul><li>Ans. wrote a book called “Wealth of Nations </li></ul><ul><li>Self Interest is also called what? </li></ul><ul><li>The invisible hand </li></ul>

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