2. Business Ownership and Operations Freshman Seminar - Introduction to Business Bishop Kearney High School Dr. Hays

3. Organizing a Business Three main types Sole proprietorship Partnerships Corporations

4. US Businesses by Type

5. Business Revenues

6. Sole Propietorships Business owned by 1 person 3/4 of all businesses in US Advantages Easy to start License and permit Are in charge, make all decisions Keep all the profits Lower income taxes Disadvantages Unlimited liability Responsible for all debts Limited access to credit Lack of appropriate skills Ends with death

7. Partnerships Owned by two or more persons Share the risk and rewards Need an agreement www.medlawplus.com/legalforms/instruct/sample- partnershipagreement.pdf www.medlawplus.com/legalforms/instruct/sample- partnershipagreement.pdf Advantages Easy to start Easier to obtain capital Banks more willing to loan Not dependent on one person Income taxes lower Skills and talents of partners Disadvantages All partners share risk Disagreements Share unlimited legal/financial liability

8. Corporations Registered by a state Operates apart from owners Corporate charter from state A license to run a corporation Raise money by selling stock Board of directors Govern operations

9. Advantages and Disadvantages of Corporations Advantages Limited liability No more than what owners have invested Raise money through stock Does not end with death Disadvantages Pay taxes twice Difficult and costly to start

10. Other Business Types Cooperative Organization owned and operated by members www.dfamilk.com www.oceanspray.com Save money on purchases Nonprofit organization Focuses on providing services Register with government Do not pay taxes Examples??? Franchise Contractual agreement Invest money Share profits or pay franchise fees Well-known name and business plan

11. In Class Work Research the Web Look up three different franchises In Excel spreadsheet provide name of franchise, what the company does, initial franchise investment, ongoing fees, assistance from Franchisor www.franchiseadvantage.com/handbook/mcdonalds.ihtml www.mcdonalds.com/corp/franchise/franchisinghome.html

12. Sample Chart FranchiseProduct or Service Initial Investment/ Total Investment Ongoing Fees or % Profits Pd. To Company Franchisor Support Services McDonaldsFast Food$45,000/ $506,00- $1,600.000 12.5%Marketing, Financial Skills Training