1. By the end of this lesson you should: 1. Identify different types of businesses. 2. Can differentiate aspects of corporations, partnerships, franchises, and sole proprietorships. 3. Can assemble questions on these for review.

2.  A Sole Proprietorship is the most common form of business.  It’s owned and controlled by ONE person.  It makes up 40% of all businesses in the U.S. https://www.youtube.com/watch?v=KY neLGRTgy8 Mark Cuban on starting your own business: Daymond John on starting your own business: https://www.youtube.com/watch?v=us Kz6WRvs3A

3. ADVANTAGESDISADVANTAGES  Easy to get started  Few regulations  Doesn’t have to share any profits  Doesn’t have to pay business income tax  Unlimited Liability  Difficulty to raise money  Limited life

4.  Large Corporations offer FRINGE BENEFITS which makes it harder for small businesses to recruit and keep employees.

5. Total 2008 net income of the 22.5 million sole proprietorships amounted to 265 billion dollars. IRS statistics show that in 2008, the average annual net income of a sole proprietorship was only $12,000.

6.  A business jointly owned by two or more people. ◦ HP Zuckerberg, Parker, Saverin (Facebook) Gates and Allen (Microsoft)

7. ADVANTAGESDISADVANTAGES  They bring in different ideas and different areas of expertise.  Access resources  Few regulations  Easy to open and close  Each partner is responsible for each other and how well the company does.  Limited life  Potential conflict between partners

8.  A Corporation is a business owned by stockholders and is recognized by laws as a separate entity.  You need a LICENSE to form a corporation.  Stockholders are the owners of a corporation.

9.  Stockholders purchase STOCKS to own part of the company.  If the company does well, stockholders may receive a DIVIDEND, part of the profit gained.

10.  Public Company – a corporation that issues stock to be publically traded.  Private Company – owners control who can buy or sell its stock.  Two duties of the board of directors 1.Select a President 2.Keep shareholders informed

11. ADVANTAGES  Corporations have a lot of money. ◦ 18.2% of all corporations make more than $1 million  Has professional leadership. ◦ This allows for higher profits and greater growth.  Two other advantages are stable ownership and very responsible. http://thewaltdisneycompany.com/abou t-disney/leadership/board-of-directors

12. DISADVANTAGES  Corporations charters are hard to obtain because of START UP COSTS  Owners DO NOT have direct control over business decisions.  Corporations are subject to DOUBLE TAXATION!  Corporations are also subject to multiple REGULATIONS that smaller businesses are not. http://www.polleverywhere.com/multi ple_choice_polls/Jf5G8S28n1Od0L5 http://www.dos.ny.gov/corps/busguid e.html

13. Businesses would merge for two reasons 1. The desire for the business to become bigger. 2. Efficiency - Economies of Scale: the cost of production falls as producer grows.

14.  A Horizontal Merger is combining two or more firms that produce the same kind of product or service.  A Vertical Merger is combining firms involved in different steps of manufacturing a good.

15.  Conglomerates – a firm that has at least four businesses, each making unrelated products. GE

16.  Multinational Corporations – a large corporation with branches in several countries. ◦ Multinationals helped developing nations by… ◦ Multinationals hurt workers in the U.S.

17.  A Franchise is a business that licenses the right to SELL ITS products in a given area.  A franchisee is when a person buys the rights to sell the parent company’s products.

18. Four types of food franchises:  Fast Food – McDonalds, Burger King, Wendy’s  Pizzerias – Pizza Hut, Dominoes, Papa John’s  Ice Cream – Dairy Queen, Cold Stone…  Coffee – Tim Horton’s, Dunkin’s, Starbucks

19.  A COOPERATIVE is a business operated for the shared benefit or the owners, who are also its customers. ◦ Associated Press (News Co-Op) ◦ Sunkist Growers (Farmers Co-Op) ◦ BJ’s (Consumer Co-Op)

20.  Non-Profit Organizations acts like a business organization.  It’s purpose is usually to BENEFIT SOCIETY. ◦ Amnesty International ◦ Red Cross ◦ UNESCO ◦ Salvation Army