1. Chapter 33

2.  The process of starting and managing your own business  Entrepreneurs – are people who organize, manage, and take a risk to own a business  Examples: Henry Ford – Ford Company Ray Kroc – McDonalds Bette Graham – Liquid Paper Terri Tuttle - Baxters Tyler Megargel – Crayola Coloring Sheets

3.  Losing money – your investment  No guarantee for success: Lots of time and effort

4.  Personal freedom – Not controlled by anyone else, can set own schedules  Personal satisfaction – Doing what you enjoy  Increased income – rewards for hard work  Increased self-esteem – From being successful

5.  Potential loss of income – could lose money  Long and irregular hours  Necessity for strong self-discipline –  May have to do tedious, time-consuming tasks such as cleaning, answering phones, paperwork

6.  Small businesses provide 55% of jobs for our labor force  Small businesses produce 50% of the Gross Domestic Product (goods and services produced in the U.S. using our labor and property)  Offer consumers choices of goods and services  Improve products and processes  Challenge existing businesses to become better  Generates jobs

7.  Owned and operated by one person  The most common form of business ownership  Approximately 70% of all U.S. businesses fall into this category

8.  Gets to keep all of the profits  Relatively easy to start  Get to make all business decisions on own  Taxed less than any other business  More freedom from government regulation

9.  Unlimited liability – you have all of the responsibility for the debt  Limited assets such as money to reinvest in business  Making all of decisions can be hard

10.  Characteristics – legal agreement between 2 or more people to start a business  Only 10% of businesses in U.S.  Should have a partnership agreement – done by an attorney

11.  General Partnership – each partner shares in the profits and losses (unlimited liability)  Limited Partnership – each partner is limited for any debts only up to the amount of investment; Limited partners typically have no voice in the decisions of the business

12.  Combines the skills of the owners  Have more money to work with  Taxed less heavily than a corporation

13.  Owners may not always agree  Partners actions are legally binding on other partners  Business is dissolved if one partner dies

14.  Characteristics:  Business that is chartered by the state  Legally operates apart from the owner or owners  Most complicated  Have a board of directors who make decisions for the corporation

15.  People who actually have ownership in the corporation and have limited liability  Stock – unit of ownership in the corporation

16.  Owners have limited liability  Easier for corporation to raise money  People can easily enter and leave the business  Each operation area is typically professionally managed

17.  Complex to form  Increased government regulation  Higher taxes on profits  Intricate accounting and record keeping

18.  Sole proprietorships and partnerships - File for a “Doing Business As” (DBA) – your county government recognizes that your business exists.  Corporations – File for “Articles of Incorporation” – with securities bureau in state department of commerce (name, address, purpose, directors, and amount of stock to each director)

19.  Local licenses – zoning ordinances, building codes, safety standards  Obtain a state license – protects people from unqualified people practicing in a business  Examples: Doctors, accountants, cosmetologists, barbers, marriage counselors, and pharmacists

20.  An agreement to operate a business in the name of a recognized company  Franchisee – the person purchasing the franchise  Franchisor – the owner of the franchise  Must run the franchise per the franchisor’s specifications  http://www.culvers.com/franchise/how.aspx http://www.culvers.com/franchise/how.aspx  http://www.steaknshakefranchise.com/costs- and-qualifications-requirement-information.php http://www.steaknshakefranchise.com/costs- and-qualifications-requirement-information.php