1. Starting a Business
Chapter 8

2. Entrepreneur
A person willing to take a risk to gain a profit and be their own bosses
Any entrepreneurs that you know?

3. Entrepreneurs Have to learn and know about: Laws Regulations Tax codes
Competition

4. Famous Entrepreneurs Thomas Edison Steve Jobs Bill Gates
Mark Zuckerberg
Shaylin

5. Famous Entrepreneurs

6. Relevant Factors?
Start-up costs
Maintenance costs
Risk

7. Help from Government Startups – a beginning business enterprise
Small-business incubator – private or government funded agency that assists new businesses by providing advice or low-rent buildings and supplies
Why is it important to generate jobs and create business?

8. Book Keeping
Inventory - Extra supply of items that are used in your business, such as raw materials or goods for sale
Wages
Receipts – income received from the sale of goods and/or services; also, slips of paper documenting a purchase

9. KEEP AND DOCUMENT EVERYTHING!!
You will need receipts, payroll forms, and expenses to file for taxes!!

10. Advertising
Word of mouth is the best type of advertisement, especially in the service sector.
Flyers, newspapers, community newsletters, and websites are all good places to advertise.

11. Sole Proprietorship Business owned and operated by one person
Smaller, possibly side businesses
Farmers
18 million in the USA
Advantages and disadvantages?

12. Proprietor
Owner of a business

13. Unlimited liability Sole proprietors have unlimited liability
Requirement that an owner is personally and fully responsible for all losses and debts of a business

14. Assets All items to which a business or household holds legal claim
Examples…
Farmers?...

15. Partnerships Business that two or more individuals own and operate
Examples?
Pawn Stars
Partnerships borrowing power is generally greater than sole proprietors. Why?

16. Limited partnership
Special form of partnership in which one or more partners have limited liability but no voice in management

17. Limited Liability Company, LLC
Type of business enterprise that protects members against losing all of their personal wealth; members are taxed as if they in a partnership
Hastert Trucking, LLC

18. Joint Venture
Partnership set up for a specific purpose for a short period of time
Real estate investors

19. The Corporate World

20. Corporation
Type of business organization owned by many people but treated by law as though it were a person; it can own property, pay taxes, make contracts, and so on…
Read about Wal Mart “The Biggest of Them All” pg 219
The corporation is separate from stockholders

21. Stock
Share of ownership in a corporation that entitles the buyer to a certain part of the future profits and assets of the corporation

22. Articles of Incorporation
Document listing basic information about a corporation that is filed with the state where the corporation will be headquartered
Four items:
Name, address, and purpose of the corporation
Names and addresses of the initial board of directors
Number of shares of stock to be issued
Amount of money capital to be raised through issuing stock

23. Corporate charter
License to operate granted to corporation by the state where it is established

24. Stock
Common stock – shares of ownership in a corporation that give stockholders voting rights and a portion of future profits
Dividend – portion of a corporation’s profits paid to its stockholders
Preferred stock – shares of ownership in a corporation that give stockholders a portion of future profits but no voting rights

25. Stocks
Why would anybody want common stock if preferred stock gets paid first??
Bylaws – a set of rules describing how stock will be sold and dividends paid
Stockholders elect a Board of Directors, bylaws govern the BoD and list their duties.

26. Franchise
Contract in which one business sells to another business the right to use the franchisor’s name and sell its products

27. Franchises

28. Advantages and disadvantages
Name brand
Method of business
Advertising
Success rate
Disadvantages
No control
Legal problems?