Daily Information 12/1 Objectives: 1.Describe the characteristics of successful entrepreneurs. 2.Discuss the advantages and disadvantages of sole proprietorships. Warm Up: Would you want to own and run a business someday? Why or why not? If so, what would your dream business be? Agenda: 1.Warm Up 2.Sole Proprietorship P.P. 3.Partner Activity 4.Bottom Line

What is an Entrepreneur? Someone who assumes risk of owning and operating a business Purpose to make a profit Invest time and effort to become successful Most fail for financial reasons 2

Characteristics of Entrepreneurs Self-starters Energetic Independent Take-charge Creative Personable Experienced Well informed 3

Starting a Business What business will you start? What is your business plan? Type of business ownership Necessary skills and characteristics Business goals 4

Elements of a Business Plan Nature of the Business Detailed description of products and/or services Estimation of risk based on analysis of industry Size of business Location of business Background of entrepreneur(s) Chapter 5 Proprietorships and Partnerships Goals and Objectives Basic results expected in the short and long run Results expressed as sales volume or profits Marketing Plan Customers and demand for the product or service Prices for the product or service Comparison of product or service with competitors Financial Plan Investment needed to start and maintain business Projected income, expenses, and profit Cash start-up and cash flow needs Organizational Plan Legal form of ownership Legal factors: licenses, leases, contracts Organization chart Job descriptions and employee skills needed Physical facilities: building, equipment, tools

Why have a business plan? In your notes, describe the advantages of developing a business plan. 6

Sole Proprietorship A business owned and operated by one person (must have expertise and money) Proprietor: the owner/manager Simplest and most common form of business ownership Many large businesses began as small struggling sole proprietorships. 7

Sole Proprietorships in Comparison Breakdown of Business Ownership Total Sales Revenue

Sole Proprietorship: Disadvantages  Unlimited liability  Lack of continuity  Lack of money  Limited management skills  Difficulty in hiring employees Advantages  Ease of start-up/closure  Pride of ownership  Retention of all profits  Quick decision-making  No special taxes  Flexibility/Your the boss!

Unlimited Liability A legal concept that holds a business owner personally responsible for all the debts of the business. **This is the major factor discouraging the use of sole proprietorship. © EDYTA PAWLOWSKA/SHUTTERSTOCK

Proprietorships In general, the type of business that can be operated suitably as a proprietorship is one that: Is small enough to be managed by the owner or the few people the owner hires Does not require a large amount of capital (money) Part-time businesses (common b/c they work well for stay at home parents) 11 *What are some examples of proprietorships?

Sole Proprietorships Businesses providing personal services Dentists Accountants Landscape Gardeners Carpenters Painters Hair Salons Website Developers Small scale sale of merchandise Newspaper Stand Television-Repair Shop Family Restaurants Flower Shops Corner Grocery Stores Clothing Boutique Web based businesses

Partner Activity You may work with one other person to answer the following: Checkpoints on page 113,119,120 Assessment on page 116: 1,2,4 Assessment on page 120: 1,2,4 Page 130 & 131: 2,3,6,7,9,11,13,14,17,18 13

Individual Activity Page 134 in the Textbook Case: 5-2 “To Partner or Not to Partner” Questions: 1-5 **These are short answer questions so be specific with your answers. 14