Chapter 18 A Business of Your Own

I. A Business of Your Own --Entrepreneurship: starting and owning your own business --Entrepreneur: someone who starts own business --need to have good imaginations --good planner and organizer --usually start as small business, then potentially grow Read example at top of page 231.

A. Retail Businesses 1. retail business: sell products like food, clothing, or cars a. most are one-of-a kind shops b. franchise: right to sell a company’s products in a specified field Example: McDonald’s c. may make the items they sell d. may buy the items they sell from someone else B. Service Business 1. service business: perform tasks for their customers a. Ex: cleaning houses, mowing lawns, and dry cleaning

II. Do You Want to be an Entreprenuer? A. Goals 1. make more money 2. do the job better than another company or person 3. develop a new idea 4. be their own boss, set own hours, make own decisions 5. gain recognition in the community

B. It’s not for everyone. Ask yourself: 1. Do you have unlimited ambition and drive? 2. Do you have a good knowledge of the product or service? 3. Do you make good decisions? 4. Can you supervise people fairly? 5. Can you motivate people to do their work well? 6. Are you comfortable around people you don’t know?

1. long hours 2. a lot of stress 3. financial risk--it’s very expensive 4. must pay rent, wages, and taxes 5. must buy equipment and supplies C. Disadvantages

A. What type of business do you want to start? B. Service or Product? C. Who will your customers be? D. How will you service them? III. Planning a Business

1. must equipment be purchased? 2. What kind of supplies are needed? 3. Is office space or store space needed? 4. What kind of advertising should be done? 5. At what price should the goods or services be sold? 6. Are employees needed E. Financial Consideration

A. Sole Proprietorship--owned by one person 1. easiest and smallest 2. owner makes ALL decisions, does most of work, makes all profits 3. disadvantages a. responsible for ALL bills b. must do ALL the work IV. Types of Business Organizations

B. Partnership--owned by 2 or more people 1. work and expenses and profits are shared C. Corporation--legally act as a 1 person, even though many people own it 1. people buy a part of the business (stock) 2. stockholders: owners of the stock 3. selling stock allows a greater amount of money to the business 4. stockholders do not make decisions 5. decisions made by board of directors, voted on by stockholders **Look at example of stock certificate on top of page 238.