Presentation Transcript

1. BUSINESS BASICS A business is an organization involved in the trade of products, goods, or services, or both to consumers or other businesses.
2. Businesses Ownership Exist Provide goods/products Provide services To make a profit Not for profit Privately owned Publically owned Multiple owners Are referred to as companies
3. BASIC FORMS OF BUSINESS OWNERSHIP
4. Businesses = FLOP Funding Liability Ownership Profits How do they get funded Who has the Liability Who owns the business Who gets the profits
5. Sole proprietorship: A sole proprietorship is owned by one person and operates for profit. A sole proprietor has unlimited liability for obligations incurred by the business. All assets and real property belong to sole proprietor.
6. Sole Proprietorship Advantages Disadvantages
7. Sole Proprietorship Advantages Disadvantages Unlimited liability Limited life of the business Difficult to raise money Risk of loss not shared Easy to Start Little Government regulations Profits stay with owner Pride of ownership Complete control Lower taxes
8. Partnership A partnership is a business owned by two or more people. Each partner has unlimited liability for debt incurred by the business.
9. Partnership Owned, financed and controlled by upwards of 2 or more partners Terms of Partnership agreed through contract Common in professions – lawyers, accountants, architects, surveyors, estate agents, vets, etc.
10. Partnership Advantages Disadvantages
11. Partnership Advantages Disadvantages Profits are shared Limited life of business Potential for disagreements Unlimited Liability All partners liable for the debts of the others Partnership dissolved on death of one partner Potential for conflict Decisions of one partner binding on the rest Limited access to capital Easy to start & set up Little government regulation Combinations of skills Greater access to capital Shared responsibility/liability Greater opportunity for specialization
12. Corporations An organization of people legally bound by a charter to conduct some type of business
13. Corporation: The owners of a corporation have limited liability and the business has a separate legal personality from its owners.
14. Corporations can be either government-owned or owned by individuals. They can organize either for profit or as not-for-profit organizations.
15. A privately owned, for-profit can be privately held by a small groups of individuals, or publically held with publically traded shares listed on a stock exchange.
16. A non-government for-profit corporation is owned by its shareholders, who elect a board of directors to direct the corporation and hire its managerial staff.
17. Corporation Advantages Disadvantages
18. Corporations Advantages Disadvantages Difficult to start Less direct control Double the taxation Limited activities Easy to raise funds Limited liability Unlimited life of business Specialized management Risks are shared by many
19. Types of Businesses Service Retailers Distributors Manufacturers Real Estate Agriculture Mining Transportation Utilities
20. Service businesses offer intangible goods or services typically charge for labor
21. Retailers and distributors act as middlemen and get goods produced by manufacturers to the intended consumers. They make their profits by marking up their prices.
22. Real estate businesses sell, rent, and develop properties including land, residential homes, and other buildings.
23. Manufacturers produce products from raw materials or component parts. They sell their products at a profit.
24. Agriculture and mining businesses produce raw materials such as plants or minerals.
25. Information businesses generate profits from the sale of intellectual property and include movie studios, publishers, and internet and software companies
26. Transportation businesses deliver goods and individuals to their destinations for a fee.
27. Utilities produce public services such as electricity.
28. Cooperatives A cooperative (Coop) is a limited liability business that can organize for-profit or not-for-profit. A cooperative differs from a corporation in that it has members not shareholders. They share decision-making authority. Cooperatives are typically consumer cooperatives or worker cooperative.
29. Key Business Terms Management: The efficient and effective operation of a business is called management.
30. Capital: When businesses need to raise money, they sometimes offer securities for sale. Capital may be raised through private means or by an initial public offering on a stock exchange. Other ways to raise money is bank loans or with venture capital.

31. QuiZ ! Yeah, thank you Mr. Jeff

    You will have a Quiz on Thursday on the basics of business. We will review for the quiz Wednesday for 15 minutes
32. What’s the franchisor Slogan? “Go into business for yourself But not by yourself”
33. What’s a Franchise? A person or group of people(franchisee)the right to sell a product or service using the trademark and or the trade name of another business(the franchiser).
34. 2010 Franchise Facts USA Franchised small businesses = 380,000 75 different industries 40% of all retail sales 1 of every 12 retail businesses New franchise outlet every 8 minutes Surprised???
35. Franchises Advantages Disadvantages
36. Franchises: Advantages Disadvantages Restrictions from franchisor Geography, Products, Vendors, Operations On going Royalty/advertising fees on sales May be expensive to own and operate Stiff penalties from franchisor if business is sold or closed Added costs for legal and accounting services Loss of individuality Term of franchise agreement can be set by franchisor Proven idea Brand name recognition Support from franchisor Training Advice Proven std operating sys. Exclusive rights Established relationships with suppliers=buying power Financing may be easier than starting from scratch R &D support Association of other Franchisees