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Lesson 1 business organization - power point - duke
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- 3. Have you everthought about starting your own business? If you were your own boss, what type of business could you see yourself running 5, 10 ,15 years from now?
- 4. Sole Proprietorship A businessowned and managed by a single individual. • 75% of all businesses • 6% of sales. • (67% make less than $25k). • Examples- Bike shop, barber, gardener, bakery.
- 5. Sole Proprietorship Positive •Full control. •Start-upcosts low (business license). •Relatively few regulations. •Full receiver of profits. •Taxation. •Easy to discontinue.
- 6. Sole Proprietorship Negative • Unlimitedliability. • Limited capital ($) for expansion. • Lack of permanence.
- 7. Partnerships A business organizationowned by two or more persons. • 7% of all businesses. • 5% of all sales. *General v. Limited Partnerships or (LLP). • Examples- Doctor, Lawyer, Accountant.
- 8. Partnerships Positive • Low start-upcosts • Shared decision making. • Specialization/complimentary qualities. • Larger pool of assets = expansion. • Taxation.
- 9. Partnerships Negative • Unlimited liability. •Potential for conflict.
- 10. Corporations A legal entity,or being, owned stockholders. • 20% of all businesses. • 90% of all sales. • Examples: Wells Fargo, UPS, Disney, Wal-Mart.
- 11. Corporations Positives • Limited liability. •Capital investment and expansion easy w/stock offering. • Stockholders do not carry responsibility for corporation’s actions. • Easy to raise money to purchase capital. • Long life.
- 12. Corporations Negative • Difficult andexpense of start-up. • Double taxation. (Corporate and Individual) • Loss of Control = Stockholders. • More regulations.
- 13. Corporation Combinations 1. HorizontalMerger – The joining of two or more firms competing in the same market with the same good or service. 2. Vertical Merger – The joining of two or more firms involved in different stages of producing the good or service. 3. Conglomerate – The joining of companies that produce entirely different products. (Remember Sara Lee?)
- 14. Franchise A semi- independent business thatpays fees to a parent company. •The franchisee is granted the exclusive right to sell a certain product or service in a given area. •Franchisee must pay royalties to parent company.
- 15. Franchise Positives • Built-in reputation/brandrecognition. • Management and training support. • Standardized quality. • National advertising. • Buying power.
- 16. Franchise Negatives • High franchise/royaltyfees • Strict operating standards. • Purchasing restrictions. • Limited product line.
- 17. Match the Characteristics •Unlimited Liability • Limited Liability for Investors • Articles of Partnership • Few Government Regulations • Must Issue Stock • Articles of Incorporation • Recognizable Brand • Long Work Hours • Stricter Regulations • Needs Accurate Tax & Employee Records • Use of Personal Savings and Investments • Board of Directors • Can Be a Hybrid • Lasts for a Fixed Period of Time (5-30 years) • Life of Partnership Limited • Documents of Disclosure • Secure Financing More Easily • Quick Start Up • Complimentary Skills • Royalty Fees • Easy to Form
- 18. Becoming a Franchisee Youare interested in owning a franchise, however you need to do your research before you invest. With a partner, you are going to find 2 franchises, compare and contrast the two different franchise opportunities, and decide which is best for you. •With a partner, go to...http://www.entrepreneur.com/franchise500/index.html •Research 2 franchises. •Fill out the worksheet. •Decide which franchise is best for you.