1. Friday March 27, 2015 Types of Businesses Project Questions
Agenda
Homework
Types of Businesses
Project Questions
Step 1 Check Point

2. Civics and Economics Day 129

3. Review Scarcity? Supply? Law of Supply? Law of Demand?
Price Equilibrium?

4. Types of Businesses

5. Types of Business Organizations
Sole Proprietorship
Partnership
Corporation
Franchise

6. Sole Proprietorship A business organization run by one person.
One Owner, 85% of all businesses but only 10% of the profit

7. Sole Proprietorship 1. Owner makes all of the decisions
Advantages
Disadvantages
1. Owner makes all of the decisions
2. Owner keeps all the profit
1. Hard to raise money to run business
2. Unlimited liability- you are responsible for anything wrong.
3. You are responsible for decisions and have to be organized

8. Partnership Two or More people make the business decisions.
5% of businesses, 20% of profits.

9. Partnership Easier to raise money, because there are more owners.
Advantages
Disadvantages
Easier to raise money, because there are more owners.
People can do what they are good at, use their skills.
Share responsibility, everything isn’t on one person
Legally, it is difficult to start-need a Articles of Partnership from the government (a contract)
There are often disagreements between the owners.
Unlimited Liability-each owner is responsible if another messes up. Difficult to transfer ownership.

10. Corporations
A business organization that does not have one owner, but many
People own stock
Stock is a share of ownership in a company. (people who have stock are called stock holders)

11. Corporations
Corporations must be given a charter by the government to sell stock.
Decisions are made by a board of directors, elected people who run the corporation.

12. Corporation Must give up ownership of the company.
Advantages
Disadvantages
Stock allows corporations to raise a lot of money.
Limited Liability-Investors won’t use anymore than they invested.
Most profitable
The business will go on for years, because stock can easily be bought and sold.
Ownership is easily transferred.
Must give up ownership of the company.
Corporations pay a lot in taxes.
People with more stock has have more influence.
Heavily regulated by the federal government, must have a charter.

13. Franchise
Business in which a franchisor sells to another person, the rights to use the business name and to sell a product or service.

14. Franchise Buy a good reputation
Advantages
Disadvantages
Buy a good reputation
Supply training and financial knowledge
Provide packaging, advertising, and equipment to run the franchise
Can be expensive to buy
May have to follow a lot of rules laid down by the franchisors
If the franchisor’s business fails, so will the franchisee’s business.