1. Types of Business Organization

2. Sole Proprietorship Business that is owned and operated by one person Business that is owned and operated by one person Most basic type of business Most basic type of business Oldest and most common form of business organization Oldest and most common form of business organization Proprietor: owner of a business Proprietor: owner of a business

3. Advantages Proprietor receives all profits Proprietor receives all profits Full pride in owning your business Full pride in owning your business Decisions can be made quickly Decisions can be made quickly Fewer government regulations Fewer government regulations Low taxes Low taxes

4. Disadvantages Unlimited Liability: owner is personally responsible for all losses and debts of the business (personal assets may be seized to pay off debts) Unlimited Liability: owner is personally responsible for all losses and debts of the business (personal assets may be seized to pay off debts) Demanding and time consuming Demanding and time consuming

5. Partnerships Business owned and operated by two or more individuals Business owned and operated by two or more individuals Sign an agreement that is legally binding regarding duties, profits, and distribution of assets Sign an agreement that is legally binding regarding duties, profits, and distribution of assets

6. Advantages One person doesn’t have to be at the business all the time. One person doesn’t have to be at the business all the time. A partner can share the risk of failure A partner can share the risk of failure Creditors are more willing to lend to partners Creditors are more willing to lend to partners

7. Disadvantages You have to share rewards/profits You have to share rewards/profits You do not have total control of the business You do not have total control of the business Always a chance of disagreement between partners. Always a chance of disagreement between partners.

8. Types of Partnerships Limited Partnership Limited Partnership One or more partners have limited liability but no voice in management (may contribute money or property) One or more partners have limited liability but no voice in management (may contribute money or property) Joint Venture Joint Venture Partnership set up for a specific purpose for a short period of time. Example: Brian owns a book store. The weatherman at a local TV station wrote a book of local weather statistics. Brian called the manager of the TV station and offered to do a co-operative promotion with the station. They placed the weatherman's book in Brian's store, even had the weatherman do in-store appearances, which resulted in promoting the store's locations for the appearances, in addition to promoting the radio station and the book.

9. Corporations Type of business owned by many people but treated by law as though it were a person (can own property, make contracts) Type of business owned by many people but treated by law as though it were a person (can own property, make contracts)

10. Stock Share of ownership in a corporation that entitles the buyer to a certain part of the future profits and assets of the corporation Share of ownership in a corporation that entitles the buyer to a certain part of the future profits and assets of the corporation Preferred Stock: Shares that bring a portion of future profits but no voting rights Preferred Stock: Shares that bring a portion of future profits but no voting rights Common Stock: Shares that give owners voting rights and future profits after preferred stockholders are paid. Common Stock: Shares that give owners voting rights and future profits after preferred stockholders are paid.

11. Advantages Limited liability Limited liability Responsibility is divided among many people. Responsibility is divided among many people. Stockholders do not have to devote time to the company to make money Stockholders do not have to devote time to the company to make money

12. Disadvantages Slow decision making Slow decision making Stockholders may not be the ones that run the corporation. Stockholders may not be the ones that run the corporation. Stockholders have little or no say in how the corporation is run. Stockholders have little or no say in how the corporation is run. Double Taxation Double Taxation

13. Types of Businesses Video https://www.youtube.com/watch?v=pPVkG9krOMI

14. How Businesses Compete

15. Lowering Prices Businesses can lower prices to compete with competitors Businesses can lower prices to compete with competitors BUT, they cannot lower their prices so much that they no longer make a profit BUT, they cannot lower their prices so much that they no longer make a profit

16. Better Products Businesses compete by selling products that work better, look better, last longer, or do more. Businesses compete by selling products that work better, look better, last longer, or do more.

17. Better Customer Service Businesses can offer better service to their customers Businesses can offer better service to their customers Hire and train people that know about the products and are helpful and friendly. Hire and train people that know about the products and are helpful and friendly.

18. Economic Incentives Businesses can offer incentives to customers Businesses can offer incentives to customers Examples: Free toy in kids meals Examples: Free toy in kids meals

19. Advertising Businesses advertise by putting signs up, having TV and radio commercials, and running newspaper ads telling customers about their products. Businesses advertise by putting signs up, having TV and radio commercials, and running newspaper ads telling customers about their products.

20. Running Your Business As a group create your own imaginary business that you want to make competitive. As a group create your own imaginary business that you want to make competitive. Consider the following: Consider the following: Advertising Advertising Where would be the BEST place to advertise your product? Where would be the BEST place to advertise your product? In the advertisement, who would be your target audience and what features of your goods or services would be your selling points? In the advertisement, who would be your target audience and what features of your goods or services would be your selling points? Lower Prices: How much could you lower price and still make a profit? Lower Prices: How much could you lower price and still make a profit? Better Product: What would you improve to make your good or service stand out above the crowd? Better Product: What would you improve to make your good or service stand out above the crowd? Better Customer Service: How would you improve customer service to give you an “edge” on the competition? Better Customer Service: How would you improve customer service to give you an “edge” on the competition? Economic Incentives: What could you do in terms of lowering prices or something else to get customers to try your product in hopes that they will buy more or encourage others to try it? Economic Incentives: What could you do in terms of lowering prices or something else to get customers to try your product in hopes that they will buy more or encourage others to try it?

21. Wal-Mart: A Business Success Story? https://www.youtube.com/watch?v=EBhGPftY7DI