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Unit 4: Business Concepts in Landscaping. Objectives. Define the terms to know. Describe the advantages of owning & not owning your own business. Compare 3 legal forms of business. List sources of money to begin a new business. List the factors that determine where to locate a business.
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Objectives • Define the terms to know. • Describe the advantages of owning & not owning your own business. • Compare 3 legal forms of business. • List sources of money to begin a new business. • List the factors that determine where to locate a business. • Fill out a job application.
1. Define the Terms • Sole proprietorship – form of business operation in which the owner puts up the capital, reaps all profits, & absorbs all losses. • Partnership – business engaged by two or more people. • Corporation – form of business operation that makes the business a legal entity, separate from its owners.
1. Terms (cont.) • Private corporation – business that sells its stock publicly & can be owned by many people. • Closed corporation – business that does not sell its stock publicly. All stock is owned by only a few people, who are often related. • Fixed assets – real estate, vehicles, equipment & similar items.
1. Terms (cont.) • Working capital – money to pay wages, purchase supplies & pay utility bills. • Collateral – item(s) used to guarantee repayment of a loan. The items are of equal or greater value than the money borrowed.
2. Advantages of Owning Your Own Business • The opportunity to offer leadership & make all major management decisions. • The opportunity to build the business around your interests & personal talents. • Job security. • Certain tax advantages. • Greater income.
2. (cont.) Advantages of Not Owning Your Own Business • No responsibility for making major management decisions. • The opportunity to pursue a career without the problems of ownership. • Freedom to change jobs & relocate as the desire or opportunity develops.
3. Three Legal Forms of Business • There are 3 ways that landscape firms are commonly organized: the sole proprietorship, the partnership, & the corporation. • Each form has certain advantages for an owner.
3. Sole Proprietorship • Simplest form of doing business. • Easiest to begin and most private. • Suited for a person just beginning full-time in the business. • Owner puts up the money to finance the business (capital). • Owner is responsible for all debts.
3. Partnership • Good way of doing business for individuals with similar ownership interests. • Partners contribute equal amounts of capital, divide the work evenly, & draw the same weekly/monthly pay. • One type of partnership is one in which a single partner provides most of the capital, & the other(s) provide the technical or administrative skills.
3. Corporation • Most public method of doing business. • Closely governed by state & federal laws. • Corporations are separate from its owners. • Ownership is obtained through the purchase of shares. • Two types of corporations: private & closed.
4. Sources of Money • There are 3 ways to obtain capital for a business: 1. Use the owners’ own money or money that other people are willing to invest money into the company (best source).
4. Sources of Money (cont.) 2. Borrow from lending institutions such as banks, insurance companies, or loan companies; or borrow from people seeking to buy into the business as limited partners.
4. Sources of Money (cont.) 3. Return the profits of the firm to the business for use as capital.
5. Factors for Business Location • One of the first uses of capital is to obtain a site for the new business. Part-time landscapers may use their home as bases of operation. Full-time professional landscapers need a permanent and separate location. • The following factors should be considered when selecting a site:
5. Factors for Business Location • Size • Proximity to the market • Zoning regulations • Access • Competition
6. Fill Out a Job Application • Students will practice filling out a job application.
