intro to business

1. Forms of Business Ownership
and Organization
Small Business

2. Small Businesses
• A business which functions on a small scale level
involves less capital investment, less number of
labour and fewer machines to operate is known
as a small business.
• Small scale Industries or small business are the
type of industries that produces goods and
services on a small scale. Few examples of small-
scale industries are paper, toothpick, pen,
bakeries, candles, local chocolate.

3. Small Businesses
• Contribution of Small Business to the
Economy
• Creating new jobs
• Creating new industries
• Innovations

4. Small Businesses
• Why Small Businesses Fail
• Small business play a important role in the
economy. But one of the reasons they are so
successful is also the reason they may fail.
• Management Shortcomings
• Inadequate Financing
• Government Regulation

5. Small Businesses
• The Business Plan ;A Foundation For Success
• Large and small every business need a plan in
order to success.
• A business plan is a written document that
provides an orderly statement of company’s
goals , the method by which it intends to
achieve these goals , and the standards by
which it will measure it achievements.

6. Small Business
• The Business Plan ;A Foundation For Success
• The Customers ; A business plan identifies
who the firm’s customers will be and how it
will serve their needs.
• The Competition ; Studying the competition
can provide valuable information about what
works and what doesn’t in the market place.

7. Small Business
• The Business Plan ;A Foundation For Success
• Financial Evaluation of the industry and
Market Conditions ; This knowledge helps
develop a credible financial forecast and
budget .
• Assessment of the Risks ; A Solid business plan
acknowledge risks and outline a strategy for
dealing with them.

8. Assistance For Small Businesses
• An important part of organizing a small
business is financing its activities .
• Small Business Administration ; Small
business can benefit from using the resources
provided by Small Business
Administration(SBA) .
• The (SBA) is the principal government agency
concerned with the helping small U.S. firms .

9. Assistance For Small Businesses
• Financial Assistance from the SBA ; SBA
seldom provides direct business loans . SBA
guarantee small-business loans made by
private lenders , including bank and other
institution. SBA also guarantee micro loans
(small business loans often used to buy
equipment or operate a firm)

10. Assistance For Small Businesses
• Local Assistance for small business
• Business Incubators Local program designed
to provide low-cost shared business facilities
to small start up ventures.
• Private Investors A small business may start
with cash from the personal savings , or a loan
from a family members and friends.

11. Small Business
• Franchising It is a contract business
arrangement between a manufacturer or
another supplier and a dealer .
• Franchising Agreements the two principals in
a franchising agreement are the franchisee
(individual and business purchase a franchise)
and franchisor(firm whose product are sold).

12. Small Business
• Benefits and problems of franchising There
are many problems and benefits of franchising
• Franchising can be the quickest way to
become a business owner. Franchising
providing a wide range of product on that
place where its demanded. If franchisees fail
in any way the failure reflects on the brand as
well and this is a big problem.

13. Forms of Private Business Ownership
• There are four forms of business organization,
they are:
• Sole Proprietorship
• Partnership
• Corporation

14. Forms of Private Business Ownership
• Sole Proprietorship An unincorporated
business owned by a single individual . The
law does not distinguish between the business
and the owner . All that is legally necessary is
that the business be registered and the proper
licenses obtained. No legal separation
between business and owner.

15. Forms of Private Business Ownership
Partnership An unincorporated business
owned by more than one individual . The law
does not distinguish between the business and
the owners . Profits divided according to each
partners share of the business .Each partner
includes share of income in personal taxable
income can be “general” or “incorporated”. We
cover general only.

16. Forms of Private Business Ownership
• Corporation A business which is a separate
legal entity, established by corporate charter .
The law views the business as a separate
entity from the owner(s).Like a “person” the
corporation can own land/property, enter
agreements and hold contracts . It can be
sued, sue others or incur debts . Ownership
represented by shares held.

17. Forms of Private Business Ownership
• S Corporation; Corporations that do not pay
corporate taxes on profit; instead , profits are
distributed to shareholders , who pay
individual income taxes .
• Limited Liability Corporations ; Corporation
that sources the corporate advantage of
limited liability while avoiding the double
taxation.

18. Forms of Private Business Ownership
• Employee-Owned Corporations Business
ownership in which workers buy shares of
stock in the company that employs them .
• Family-Owned Business This is the business
started by some family member and then its
ownership change time by time.
• Not-for-Profit Corporations Organization
whose goal do not include pursuing a profit .

19. Public and Collective Ownership of
Business
• Public ( Government ) Ownership In which a
unit or agency of government owns and
operates an organization .
• Collective ( Corporative ) Ownership This
type of organizations whose owner join forces
to operate all or part of the activities in the
firm or industry .

20. Organizing a Corporation
• Types of Corporations ; Corporations fall in to
three categories : Domestic Corporation a
firm is considered a domestic corporation in
the state where it is incorporated . A company
does business in state other than the one
where it has filed incorporation paper , it is
registered as foreign Corporation in each of
those states.

21. Organizing a Corporation
• A firm incorporated in one nation that
operates in another is known as an Alien
Corporation where it operates.
• Where and How Business Incorporate
• Where to Incorporate
• The Corporate Charter
• Corporate Management
• Corporate Officers and Managers