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Sole Proprietorships

Sole Proprietorships. Being Your Own Boss. Sole Proprietorships. “A one-owner business.” Most common form of business in the U.S. (76%) Pros: Easy to organize Quick decisions can be made All profit goes to one person Pride in the business. Sole Proprietorships (Cont’d). Cons:

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Sole Proprietorships

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  1. Sole Proprietorships Being Your Own Boss

  2. Sole Proprietorships “A one-owner business.” Most common form of business in the U.S. (76%) Pros: Easy to organize Quick decisions can be made All profit goes to one person Pride in the business

  3. Sole Proprietorships (Cont’d) Cons: Limited resources to start and operate Unlimited liability: Responsible for all debts of a business Limited life: Business ceases to exist when the owner dies High failure rate: 70% fail within 5 years

  4. Franchises • “A business arrangement which allows a business to operate under the name of an established brand, like McDonald's.” • Most are sole proprietorships, but can take other forms

  5. Pros: Valuable brand and proven operating system Safety and dependability Ability to purchase a pre-existing unit (no starting from scratch) Support service Cons: Difficult approval process Less control – many rules of operation Expensive for individuals to start Franchises (Cont’d)

  6. Sample Sole Proprietorship #1 Franchise fee - $42,000 Total investment - $438,000 (build, equip, and stock your store) Average store earnings - $381,000 High operating cost: absentee ownership not allowed; 15 employees per unit required Expensive product - $4/scoop

  7. Sample Sole Proprietorship #2 • Franchise fee - $15,000 • Total investment - $310,000 • Average store earnings - $80,000 • High operating cost: absentee ownership not allowed; 6 - 10 employees per unit required • Cash liquidity requirement - Minimum $80K • 20-year term operating contract

  8. Top 10 Franchises for 2012 • Hampton Hotels ($3.7M - $13.52M) • Subway ($85K - $260K) • 7-Eleven Inc. ($30K - $1.64M) • Servpro ($133K - $181K) • Days Inn ($187K – $7M) • McDonald’s ($1M - $2.16M) • Denny’s Inc. ($1.18M - $2.4M) • H&R Block ($31K - $138K) • Pizza hut Inc. ($295K - $2.2M) • Dunkin’ Donuts ($374K - $1.6M)

  9. 2008 Franchise of the Year • 7-Eleven Inc. • Began as a Dallas-based ice cream store (open 7AM – 11PM) • 5,580 stores in the U.S. • 25,062 stores abroad • A new store opens in the world every four hours • Extensive support service – training, marketing, & operations

  10. 2012 Franchise of the Year • The first Hampton Inn opened in Memphis, Tennessee in 1984. • Hampton Inn was the first mid-price national hotel chain to begin offering a free continental breakfast and free local phone calls. • In 1995, the Hampton brand introduced Hampton Inn & Suites, which consisted of two-room suite hotel rooms with living rooms and kitchen areas. • 1907 hotels in the U.S. – plans to expand worldwide. • Now acquired by Hilton Worldwide (which has hotels in 84 countries).

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