Starting a Business Chapter 8
Entrepreneur A person willing to take a risk to gain a profit and be their own bosses Any entrepreneurs that you know?
Entrepreneurs Have to learn and know about: Laws Regulations Tax codes Competition
Famous Entrepreneurs Thomas Edison Steve Jobs Bill Gates Mark Zuckerberg Shaylin
Famous Entrepreneurs
Relevant Factors? Start-up costs Maintenance costs Risk
Help from Government Startups – a beginning business enterprise Small-business incubator – private or government funded agency that assists new businesses by providing advice or low-rent buildings and supplies Why is it important to generate jobs and create business?
Book Keeping Inventory - Extra supply of items that are used in your business, such as raw materials or goods for sale Wages Receipts – income received from the sale of goods and/or services; also, slips of paper documenting a purchase
KEEP AND DOCUMENT EVERYTHING!! You will need receipts, payroll forms, and expenses to file for taxes!!
Advertising Word of mouth is the best type of advertisement, especially in the service sector. Flyers, newspapers, community newsletters, and websites are all good places to advertise.
Sole Proprietorship Business owned and operated by one person Smaller, possibly side businesses Farmers 18 million in the USA Advantages and disadvantages?
Proprietor Owner of a business
Unlimited liability Sole proprietors have unlimited liability Requirement that an owner is personally and fully responsible for all losses and debts of a business
Assets All items to which a business or household holds legal claim Examples… Farmers?...
Partnerships Business that two or more individuals own and operate Examples? Pawn Stars Partnerships borrowing power is generally greater than sole proprietors. Why?
Limited partnership Special form of partnership in which one or more partners have limited liability but no voice in management
Limited Liability Company, LLC Type of business enterprise that protects members against losing all of their personal wealth; members are taxed as if they in a partnership Hastert Trucking, LLC
Joint Venture Partnership set up for a specific purpose for a short period of time Real estate investors
The Corporate World
Corporation Type of business organization owned by many people but treated by law as though it were a person; it can own property, pay taxes, make contracts, and so on… Read about Wal Mart “The Biggest of Them All” pg 219 The corporation is separate from stockholders
Stock Share of ownership in a corporation that entitles the buyer to a certain part of the future profits and assets of the corporation
Articles of Incorporation Document listing basic information about a corporation that is filed with the state where the corporation will be headquartered Four items: Name, address, and purpose of the corporation Names and addresses of the initial board of directors Number of shares of stock to be issued Amount of money capital to be raised through issuing stock
Corporate charter License to operate granted to corporation by the state where it is established
Stock Common stock – shares of ownership in a corporation that give stockholders voting rights and a portion of future profits Dividend – portion of a corporation’s profits paid to its stockholders Preferred stock – shares of ownership in a corporation that give stockholders a portion of future profits but no voting rights
Stocks Why would anybody want common stock if preferred stock gets paid first?? Bylaws – a set of rules describing how stock will be sold and dividends paid Stockholders elect a Board of Directors, bylaws govern the BoD and list their duties.
Franchise Contract in which one business sells to another business the right to use the franchisor’s name and sell its products
Franchises
Advantages and disadvantages Name brand Method of business Advertising Success rate Disadvantages No control Legal problems?