Speaking Of AFLAC Watch Out For This AFLAC Scam

2. Speaking Of AFLAC Watch Out For This AFLAC Scam

3. Bill Gates $113 Million House http://www.usnews.com/usnews/tech/billgate/room12a.htm Bill’s wife, Melinda, attended Ursuline Academy in Dallas, TX. She graduated from Duke University with a major in “Economics.” Most expensive residential house ever built. The $1.4 million guest wing has two bedrooms, 2 bathrooms, and its own dinning room. 66,000 square feet equal to 1.5 acres. The house has 7 bedrooms, 24 bathrooms, 6 kitchens and 6 fireplaces. The annual property taxes run around $990,000.

4. THE BUSINESS POPULATION Business Shares of Domestic Output Percentage of Firms Percentage of Sales Corporations 20% Partnerships 8% Corporations 84% Sole Proprietorships 72% Partnerships 11% Farmer Sole Proprietorship 5%

5. Sole proprietorships–oneindividualin business for himself. They make up72%of all businesses and take in5%of total profits. They are thesimplest to formbecause of the small amount of capital needed to start up.Examplesare beauticians, dentists, lawyers, dry-cleaning and lawn care and lemonade stands.

6. Advantages of a Sole Proprietorship A.Easyto quit the business if the owner decides to do so. There are no co-owners to consult. B. Owners receive theentireprofit. C.Easyto form–no complicated legal documents or complicated tax forms, small amount of capital needed. Personal satisfaction (psychological-being your own boss) prestige and a sense of accomplishment. D.Totalcontrol – can make decisions quickly, can hire and fire easily, can respond quickly to trends.

7. A.Unlimitedliability (debt) - have to forfeit their personal possessions as well as their businesses. (auto, other business, house, savings) B. Burden ofsoleresponsibility – must have business sense. C.Limitedpotential for growth – collateral (any thing of value to guarantee a loan [like giving up your personal possessions) [Let’s say you put your home up for collateral but have to give it up] D.Difficultto attract qualified employees–can’t offer fringe benefits. [Let’s say you ask for more benefits] E.Shortlife span – depends on owner’s health and competence. If the owner dies, it is over. Disadvantages of Sole proprietorships I want medical benefits!

8. What Would Happen If The Clintons Went Bankrupt? Other Examples of Sole Proprietorships

9. Partnership - business operated by 2 or more people.They are theleast commonwith only8%and take in only11%of profits. Two Forms of Partnerships 1.General– equal decision making &unlimited liability among partners. 2.Limited– some non-active partners join as an investment (and thus have limited liability-just the investment,not the property). He is a“silent”partner. Let’s say your silent partner puts up $30,000 to insure the loan. I gave $30,000 as a silentpartner, so I don’t have to do anything.

10. Advantages of Partnerships [“Two heads are better than one.”] Two Heads better than One Head Specialization– specific duties assigned to different partners. A. Sharingof losses. Can borrow more and can sustain heavier losses. B. Easyto form. Small amount of money to start & operate. C. Shareddecision making – more informed decisions. D. Personal satisfaction– sense of accomplishment.

11. 8.Disadvantages of Partnerships A. Disagreements among partners – conflicts delay decisions, lower employee morale, & lessen efficiency. Each partner is responsible for the acts of all other partners. Must choose good partners. B. Have to sharethe profits. C. Unlimited liability – can lose their business and personal possessions. D. Limited life – sickness, conflicts, or death can end the partnership. Take That!

12. Demonstration of “Unlimited Liability” Harold Nodoe, Gloria Poorand Jack Rich owned the Trio Dress Shoppe as a partnership. Under the terms of Their partnership agreement, Nodoe and Poor were entitled each to 40% of the profits, while the remaining 20% went to Rich. Last month the firm collapsed. After selling off everything it owned, the company still owed its creditors $10,000. Since Nodoe and Poor had no assets of their own, the creditors recovered the total amount owed to them from Jack Rich’s personal bank account. Harold Nodoe Gloria Poor Jack Rich

13. Advantages/Disadvantagesof Sole Proprietorships Advantages Disadvantages Freedom Unlimited Liability Ease of Formation Lack of Continuity Low Start-up Costs Difficulty Raising Money Single Taxation Reliance On One Person Advantages/Disadvantagesof General Partnership Advantages Disadvantages Larger Talent Pool Unlimited Liability Larger Money Pool Lack of Continuity Ease of Formation Ownership Transfer Difficult Possibility of Conflict Single Taxation

14. Corporations– a business organizationrecognized as a separate legal entity (existence). Stockholders– are the owners of a corporation who invest by buying shares. Stock– thecertificate of ownership. Corporations make up about20%of business organizations but produce 84%of total sales. Corporations can operate like a sole proprietor. Inc. means the business is a corporation. [Treated by the courts as an “artificial person”. They can sue, be sued, enter into contracts, and pay taxes. Two Types of Corporations Publiclyowned – anyone can invest by buying shares, sounlimited# of owners. Includes most corporations. Closed– is owned by alimitednumber of stockholders. Ford Motor Company was family owned (closed) until 1956. They went public in 1956 & issued 10,200,000 shares of stock. Exxon leads all other corporations in sales at $443 billion.

15. 16Corporate Bonds– a certificate issued by a corporation in exchange for money borrowed from investors. There is a written promise to repay the amount borrowed at a later date (anI.O.U.) lending money for 10, 20, or 30 years. Bondholders are creditors, notowners. 17Advantages of Corporations from a StockholdersViewpoint A1.Limitedliability – limited to the amount invested. His personal assets may not be seized to pay corporate debts. B2. May earn a profitwithoutworking. 18Advantages From the Corporation’s Viewpoint A1.Separationof ownership from management– can hire the best management available. Specialized talent can be hired in all areas. B2.Easyto raise capital– can issue stocks or sell bonds allowing the corporation to tap the savings of thousands. C3.Longevity– they have a lifeindependentof their owners.

16. Disadvantages of a Corporation • Disadvantages from the stockholders point of view. • When stockholders earn a profit, they feel no great sense • of pride. 19Disadvantages from the corporation’s point of view. A 1. Slow in decision making – must go thru chain of command. B2.Many government restrictions– must follow regulations of the SEC, comply with laws on merging and maintain many records. C3.Heavyorganizing expenses– pay for its charter and then depending on the state, expenses can run from a few hundred to thousands of dollars. D4.Doubletaxation– when a company distributes profits (dividends) to its stockholders, they have to pay personal income tax on dividends in excess of $100. Corporations earnings are subject to taxation. The income tax on corporations is15%on the first $50,000; 25%from $50,001- $75,000;34%from $75,001-$100,000; 39%from $100,001-$335,000;35%from 335,001-$10 mil. 38%from 10M-18.3million; & a flat35%over $18.3 million.

17. Advantages/Disadvantages of Corporations Advantages Disadvantages Limited Liability Stockholder Revolts Continuity High Start-up cost Greater likelihood of professional Management High Cost of Regulation Easier Access to Money Double Taxation

18. Largest Corporate Revenues - 2008 • Exxon Mobil 443 • Wal-Mart 405 • Chevron 263 • Conoco 231 • GE 183 • GM 149 • Ford 146 • AT&T 124 • HP 118 • Valero 118 • Bank of Amer. 113 • Citigroup 112 • Berkshire 108 • IBM 104 • McKesson 102 Largest Employers 1.Wal-Mart 1.35 M “associates” in U.S. [2.1million ‘associates” worldwide] 2. UPS 425,000 3. Citigroup 380,000 4. Target 366,000 5. McDonald’s 359,000 6. Sears holding 337,000 7. GE 327,000 8. IBM 316,000 9. General Motors 92,000 Wal-Mart has 4,179 total stores in the U.S.; 1,868 Wal-Mart stores, 1,586 Wal-Mart Super Centers, & 725 Sam’s Clubs in the U.S. The GDPs for the Virgin Islands is $1.8 billion; for Djibouti, it is $582 million; and for Afghanistan, it is $21 billion.

19. Where The Jobs Are And Were • 1980 • GM 853,000 • Ford 495,000 • GE 405,000 • IT&T 368,000 • [International Telephone & Telegraph] • 5. IBM 337,000 2009 1. Wal-Mart 1,350,000 • UPS 425,000 • Citigroup 380,000 • Target 366,000 • McDonald’s 359,000 • Sears Holding 337,000 • GM 92,000 • Ford 88,000 Then there are new jobs in new technologies that didn’t exist in 1980. Apple has 32,000; Microsoft has 55,000; Oracle has 40,000; & Dell has 46,000 Surviving as a business is no small feat. 1/3 of the firms in the Fortune 500 list in 1970 no longer exist.

21. Is Wal-Mart Too Powerful? At $405 billionin revenues, Wal-Mart is theworld’s largest company. Every day, 20 million shoppers visit Wal-Mart’s 4,750 stores. 82% of Americanhouseholds will make one purchase here during the year. Wal-Mart’s lower prices puts pressure on other retailers and saves American consumers over $100 billion a year. Consumers in the D-FW area saved an average of $895 each or cumulative of $263 million in 2008. Wal-Mart sales clerks (“associates”) pulled in $10.74 an hour, or $21,134 a year. 44% of their 1.35 million U.S. workers quit each year.143,000 Texanswork for a Wal-Mart. [largest TX employer] Wal-Mart is America’s most admired and most hated company. Their $18 billion in imports from China accounts for 1/10 of total imports from China. Their global work force numbers 2.1 million. Wal-Mart’s market share of consumer goods could hit 50% by 2010. Wal-Mart sells 32% of all diapers, 30% of hair care, 26% of toothpaste, and 10% of pet food. Outside of the U.S., they operate 1,309 stores in 10 countries, ranking as the largest retailer in Mexico[Wal-Mex] Canada. Will hire800,000 more by 2009. In China, they have 56 stores, but will have 20 more this year. They have more than 30,000 workers but will hire 150,000 more in 5 yrs.

22. Wal-Mart example • Wal-Mart’s IPO was in 1972. 300,000 shares were sold at $16.50 per share. • The stock has split 11 times(2 for 1 splits) since then – last split was in 1999. • If you purchased 100 shares of Wal-Mart on the day of the IPO you would have spent $1,650. • Today you would have 204,000 sharesof stock. • Today current value of your shares would be $10,550,880 (stock closed at $51.72 yesterday). • Each quarter you would be receiving a check for $136,680 (at current dividend of .67). Annual income for dividends alone would be $546,720!

23. Wal-Mart appears to be everywhere.Here is the latest picture from Mars. And – It looks like the latest Josh Hamilton baseball sighting – on Mars.

24. Video: “Is Walmart Good for America” Tomorrow

25. 3 Types of Corporate Combinationsmergeris when one company absorbs another AHorizontalCombinations – a merger between corporations that make the same product. This would be a merger of two or more banks, or railroads, or airline companies, etc. Firms may merge to catch up with or eliminate their rivals. . Morgan-Chase-Bank One58B Cingular-AT&T Wireless 41 B Compaq-HP 23 B GTE-Bell Atlantic 71 B Chevron-Texaco 43 B Daimler-Chrysler-Benz 41 B Sprint-Nextel 35 B Bank of Am.-FleetBoston Finan. 47 B Northwest Delta Delta

26. Horizontal Merger

27. BVerticalCombinations – merger of companies that are involved in different phases of production of the same product. [Purchasing one of your“suppliers”] Examples 1. Ford buys a tire factory 2. Bridgestone Tirebuying a rubber plantation 3. Campbell Soup buying mushroom farms 4. Funeral Home bought a cemetery and a floral shop 5. Ford bought a steel mill to produce steel needed for autos Resources [ore, coal, & iron] • ShellOil Co. owns • Oil fields • Refineries, and • Retail gasoline • stations Transportation [shipping & RR co’s] Steel Mills USX (Steel)

28. Vertical Merger

29. Conglomerate (Unrelated) Combination –merger between four or more companies producing unrelated products. None is responsible for the majority of sales. These mergers may include a number of subsidiaries – acquired companies that havenot been required to abandon their corporate identity. American Brands, Inc. Tobacco Products Distilled Spirits

30. About$3 trillionin mergers each year worldwide & about $1.6 trillion in the U.S. Diversificationis a good reason for conglomerate mergers. You are not “putting all of your eggs in one basket.” Your over- all sales and profits will be protected. R.J. Reynolds-one of biggest 1. Sea-land(containerized shipping) 2. KFC(2nd largest fast-food chain) 3. Del Monte(fruit processor) 4. Heublein(distilled spirits) Pfizermakes Viagra & Lipitor. 1. Chewing gum(Trident,Dentyne) 2. Razors(Schick) 3. Cough drops (Halls) 4. Breath mints(Clorets, Certs) 5. Antacids (Rolaids) Conglomerate Merger

31. Advantages of Corporate Mergers • Efficiency – eliminates overlapping jobs, can share resources • and marketing skills. Mergers may lead to lower consumer • prices making them better able to competein world markets. • 2. Less expensive, compared to having to build new plants and • hire new employees. • 3. Stockholders in the acquired corporations normally benefit • by having stock go up in value by about 30%. • 4. Increased size means they can borrow more money.

32. Disadvantages of Corporate Mergers • Managers of merged corporations may not have • the necessary supervisoryskills. • 2. Added unemployment when some positions are • eliminated. 12,500 were laid off in Fleet Boston- • Bank of America merger saving $650M. • When Cingular bought AT&TWireless, 10,000 • were laid off. • 3. Purchasing corporation’s stock normally declines. • 4. Fewer choices and higher prices for consumers. • 5. Acquiring corporation normally goes into debt.

33. Here are a few mergers you might not have heard of. • Hale Business Systems, Mary Kay Cosmetics, Fuller Brush • and W.R. Grace Company will mergeto become? Hale Mary Fuller Grace 2. Polygram Records, Warner Brothers and Keebler Crackers will merge to become? Polly-Warner-Cracker 3. 3M and Goodyear will merge to become? MMMGood 4. John Deer and Abitibi-Price will merge to become? Deere Abi 5. Zippo Manufacturing, Audi Motors, Dofasco and Dakota Mining merge to become? Zip Audi Do Da 6. Honeywell, Imasco and Home Oil will merge to become? Honey I’m Home

34. Franchises, Cooperatives and Nonprofit Organizations Franchisegives an individual an agreement to market a company’s product in return for a percentage (royalty) of the profits. Semi-independent business. The 1st franchise operation was started by Singer Company in 1851 to sell sewing machines. In the last 40 years, franchising has really taken off, led by Ray Kroc of McDonald’s.

35. Advantages of Franchises A1. Benefits of a well knowntradename, systemized management, andnationaladvertisement. B2. Less than5%fail each year (65% of all independently owned businesses fail within the first 5 years). C3. Chance toown your own businesswith minimumrisk. Disadvantages of Franchises A1. May betoomanyrestrictions imposed so independence is sacrificed. B2. Takes alotof money for start-up 3. May lose your investment if the company goes bankrupt. Some franchises such aspizza, video rentals, frozen yogurt, instant printing, &tanning parlorswill not make it because they are eithertoo competitiveor too unhealthy.

36. Cooperatives– voluntary association of people formed to carry on some kind of economic activity benefiting members. Different Types of Cooperatives: 1.Producer Coop– group of farmers who join to get better prices for their goods. They eliminate the middle-man charges. 2. Housing Coop – formed by members to buy the building they live in. 3. Purchasing Coop – retail store owned and operated by its customers. 4. Credit Union – members pool their savings so they can borrow from it at lower rates (the most common form of coop) 5. Service Coop – provides service to its members (electrical or telephone) 6. Baby-Sitting Coop – families swap baby-sitting duties without ever exchanging money. 26NonprofitOrganizations– provides products without making a profit. Churches are the most common. (Boy Scouts, Y.M.C.A., Salvation Army, & Goodwill)

37. Let's Take A Look At The McHistory of McDonalds

38. First McDonald's [1940] Dick & Mac McDonald

39. McHistory of McDonald’s McDonald’s is the world’s most successful fast-food franchise. They make over $23 billion annually and have 1.5 million employees (crew members). There are 31,000 stores in 120 countries. 60% are overseas. They spend $2 billiona year onadvertising. [13,700U.S. stores] They have 68 million customers each day[26 million Americans] In the 31,000 stores. They charge 14% royalty (1st stores cost $950 and 1.9% royalty) They have over 20 restaurants in Moscowincluding the world’s largest. It has 900 seats and can serve 50,000 each day. 10,000 line up every day. They have the“Bolshoi Mak”(Bolshoi means “big”). This store has27 cash registers & 630 workers (27,000 applied) who earn $425 a month. In Japan, McD’s has over 2,000restaurants. The Japanese are surprised to find out that McDonald’s is in the U.S. McD’s are called “Makudonarudo” [Ma ku do naru do] featuring “BiggueMaku.” They prefer more fat in the meat and more onions. Also burgers are garnished with a fried egg.

40. In India, they have the “Ma ha raj I Mak” – two all-mutton patties, special sauce, lettuce, cheese, pickles, onions on a sesame-seed bun. For the strictest Hindus, who eat no meat at all, there are rice-based patties flavored with peas, carrots, red pepper, beans, coriander and other spices. McD’s has adapted its menu to local tastes around the world. Thai customers can sample Samurai PorkBurgers topped with asweet barbecue sauce. In Djibouti, they have the “BoutiMak” & “bouti-licious sauce”. McD’s secret is “quality, service, cleanliness, & value.” They use the best ingredients, the best equipment, not galvanized metal, but stainless steel. Once Oprahasked Ray Kroc if he really cleaned the johns when he visited the spic-and-span restaurants. He said, “You’re d___ right, and I’ll clean one today if it needs it.” Ray Kroc struck a deal in 1954 with the two McD bros (Mac & Dick) to franchise their San Bernardino, CA stand. The first McD’s opened in Des Plaines, Illinois in 1955. Kroc bought out the McD’s in 1961 for $2.7 million and was making $1 billion by 1972. The co went public in 1965.

41. McDonald’s Slogans [23] Lets eat out! (1960-1965) Look for the Golden Arches! (1965-1967) The closest thing to home (1967) McDonald's is your kind of place (1967-1971) You deserve a break today (1971-1975) [Most famous] Enjoy the best food at McDonald's (1973, concurrent with 1971 slogan) We do it all for you (also known as You, you're the one) (1975-1979) Nobody can do it like McDonald's can (1979-1980) You deserve a break today (1980-1983) Nobody makes your day like McDonald's can (1980-1983) We cook it all for you at McDonald's (1982, McDonald's and you (1983-1984) It's a good time for the great taste of McDonald's (1984-1988) It's Mac Tonight (1985, Mac Tonight advertising) McDonald's is your place to be (1986) Good time, great taste (1988-1990) There's nothing quite like a McDonald's (1988-1990) You Deserve A Break Today (89-90, concurrent with 1988 slogan) Food, folks and fun (1990-1991) McDonald's Today (1991-1992) What you want is what you get (1992-1995) Do you believe in magic? (1993-1995, Happy Meal advertising) Have you had your break today? (1995-1997) My McDonald's (1997) Did somebody say McDonald's? (1997-2000) We love to see you smile (2000-2002) Smile (2002-2003) I'm lovin' it (2003-present) It's what I eat and what I do...I'm lovin' it) What we're made of (2008-present) McDonald’s most famous slogan

42. McD’s New Design[will cost 300,000-400,000 to upgrade to this] New packaging – “lovin’ it”. This will encourage customers to “stay awhile”.

43. Kuwait City’s opening brought 15,000 customers on opening day in 1994. The line at the drive thru was seven miles long. Proving once again that "Good Times, Great Taste" is understandable in any language. They have the McArabia, a chicken sandwich.

44. McDonald’sMcArabia in the Middle East Smash-hit menu items in one market often translate well to others. The McArabia flatbread, spicy grilled chicken fillet, onion and garlic mayonnaise sandwich that debuted in the Middle East a few years back is now popular in Malaysia and South Africa.

45. Hamburger University[Oak Brook, Illinois] 5,000 students attend each year The $40 million “Hamburger University” is located in Oak Brook & communicates in 22 languages. It has 65,000 manager graduates. Their McDegrees are in “Hamburgerology” with a minor in “Fries”. Instead of getting a sheepskin, they receive “arches”.Hamburger Universities are also located inJapan, England, Germany & Australia.

46. Hamburger University in Oak Brook, IL Entrance to Hamburger University in Japan

47. McDonald’s in ChinaMcD’shas 1,300 stores in China. They opened140 stores in 2009 & are opening 175 more in2010. “Rice Delight”

48. McDonald’s in Singapore

49. McDonald’sShrimp Mania in Japan This shrimp sandwich is wildly popular in Japan and, together with special promotional campaigns, helped end a recent slump at McDonald’s Japan. This is a critical foreign market for McDonald’s, which owns a 50% stake in its operating unit there.

50. McDonald’sin India Vegetarian dish