2. ENPI MODULE 3 LAUNCH YOUR BUSINESS

3. TYPES OF BUSINESSES Manufacturing –Converts materials into goods suitable for use and sells goods to others –Industrial vs. consumer manufacturing Wholesaling –Buys goods in large quantities and resells them in smaller batches to retailers –Link between manufacturers and retailers

4. TYPES OF BUSINESSES CONTINUED… Retailing –Buys goods, often from wholesalers, and resells them directly to consumers –Brick and mortar or e-commerce Service –Provides services to customers for a fee –Licensing requirements often exist

5. TYPES OF BUSINESS OWNERSHIP What is your liability?? –Unlimited Liability: business owner can be legally forced to use personal money and possessions to pay the debts of the business –Limited Liability: business owner cannot be legally forced to use personal money and possessions to pay business debt Level of liability depends on the type of ownership

6. SOLE PROPRIETORSHIP Single individual owns the business UNLIMITED LIABILITY Advantages:Disadvantages: SimplestLots of responsibility Least ExpensiveUnlimited liability Taxes reported on owner’s income tax return Difficult to borrow money/attract investors Complete control

7. PARTNERSHIP At least two individuals share the management, profit, and liability Write a “partnership agreement” Advantages:Disadvantages: Simple to set upRisk of losing money Two + skill sets to pull from Split profit Taxes reported on owner’s income tax return Success relies on the skills of others, not just yourself Easier to borrow money

8. TYPES OF CORPORATIONS Subchapter S Corporation Limited Liability Companies Nonprofit Corporations

9. CORPORATION Ownership in which the business itself is considered a type of “person” and limited liability is granted to the business owner Owners = shareholders/stockho lders Share of stock = % ownership in company Advantages:Disadvantages: Shareholders have limited liability Difficult and expensive to set-up Ownership can be ended by selling stock Regulated under state laws =must “incorporate” Lifespan of corporation is not tied to life span of owners Corporate profit are taxed twice (on profit it earns and shareholders pay personal taxes) Mgmt decisions made by board of directions Easier to raise money

10. HUMAN RESOURCES

11. DEFINING HUMAN RESOURCES People employed in a business Contribute more than labor! –Character –Ethics –Creativity –Networking –Reflect your brand