1. Business Organizations
By: Mrs. Stonis-Anderson

2. Objectives Describe profit, risk-taking, and entrepreneurs.
Describe service, merchandising, and manufacturing businesses.
Compare the sole proprietorship, partnership, and corporate forms of business.
List the advantages and disadvantages of each form of business organization.

3. Business Description
Describe the business you are, or want to be, it should include
Form of Business
Specific product or service
Proposed location of the business
location
Existing potential customers, their geographic area: domestic, international
Brief history
How was or will the business be financed
Who are, or will be, the owners

4. When you hear the word business, what do you think of?

5. What is an Entrepreneur?
(Instructor: You can just press play on this or do an intro…the video needs no introduction. Inside scoop: As a backgrounder, “Grasshopper” is a company which provides services to start up entrepreneurs. The entrepreneur who founded the venture has a wife with a creative design firm on Twitter – her firm did this movie. A family of entrepreneurs. It was so successful, large companies started copying it.)
@Copyright Katherine Korman Frey

6. Shark Tank
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7. What is an Entrepreneur?
One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them.

8. The Environment of Business
When you hear the word business, what do you think of?
In the U.S. we have a free enterprise system; people are free to produce goods and services and spend money as they wish.
A business can operate at a profit or a loss. If the revenues are greater than the costs, the money left over is profit. When costs are greater than revenues, the business operates at a loss.
In order to survive, a business must
operate at a profit, and
have an individual willing to take the risk to run it

9. The Need for a Risk-Taker
In a business, inventors generate ideas, employees provide labor, and managers supervise. An entrepreneur transforms ideas into actual businesses.

10. Benefits of Entrepreneurship
The opportunity to:
Create your own destiny
Make a difference
Reach your full potential
Reap impressive profits
Contribute to society and to be recognized for your efforts
Do what you enjoy and to have fun at it
Ch. 1: The Foundations of Entrepreneurship

11. Drawbacks of Entrepreneurship
Uncertainty of income
Risk of losing your entire investment
Long hours and hard work
Lower quality of life until the business gets established
High levels of stress
Complete responsibility
Discouragement
Ch. 1: The Foundations of Entrepreneurship

12. FIGURE 1.5 Small Business by Industry
Source: U.S. Small Business Administration, 2007.
Ch. 1: The Foundations of Entrepreneurship

13. Ten Deadly Mistakes of Entrepreneurship
Management mistakes
Lack of experience
Poor financial control
Weak marketing efforts
Failure to develop a strategic plan
Ch. 1: The Foundations of Entrepreneurship

14. Ten Deadly Mistakes of Entrepreneurship
Uncontrolled growth
Poor location
Improper inventory control
Incorrect pricing
Inability to make the “entrepreneurial transition”
Ch. 1: The Foundations of Entrepreneurship

15. Avoiding the Pitfalls of Small Business Failure
Know your business in depth
Develop a solid business plan
Manage financial resources
Understand financial statements
Learn to manage people effectively
Set your business apart from the competition
Maintain a positive attitude
Ch. 1: The Foundations of Entrepreneurship

16. Conclusion Entrepreneurs:
Are an important part of the free enterprise system
Are a diverse and talented group of people
Represent a cross-section of society as a whole
Are able to enhance the profitability of their businesses through acquiring additional knowledge and experience
Ch. 1: The Foundations of Entrepreneurship

17. Thinking Entrepreneurial
Who is one person, famous or not, who has made a difference?

18. Traits of Entrepreneurs
Most entrepreneurs:
are self-starters.
have organizational skills.
have marketing knowledge.
have accounting skills. .

19. Role of Entrepreneurs
There are pros and cons to being an entrepreneur. .

20. Entrepreneur – Who, Me?
Have you thought about owning a business? If so, you should ask yourself these questions:
Do you have good writing and speaking skills?
Are you creative or mechanical?
Are you a self-starter?
Do you have accounting or marketing skills?

21. Characteristics of an Entrepreneur
Which item does not belong
on the Entrepreneur List?
Action oriented
Always strives to do things better
Drive to achieve results
Does not need supervision to get tasks done
Likes to work the same hours every day
Incredibly persistent

22. “Likes to work the same hours every day”
why do you think this does not fit in a description of an entrepreneur.
“Likes to work the same hours every day”

23. Entrepreneurial Passion
Discuss one area about which you are passionate.
What are problems you’d like to see solved or areas of need related to this area?
How could you make a business out of solving that problem?

24. Types and Forms of Business
In a free enterprise system, an entrepreneur can choose the type and form of business to run. .

25. Forms of Business Organization
Most U.S. businesses are organized in one of three ways:
sole proprietorship
partnership
corporation

26. Types of Business Operations
There are three types of business operations:
Service businesses provide services for fees.
Merchandising businesses buy and sell finished products.
Manufacturing businesses buy materials and make finished products.
Each type needs capital (money) from investors, banks, or business owners to begin.

27. Example of Merchandising Business
Example of Service Business
Example of Merchandising Business
Example of Manufacturing Business

28. Key Terms manufacturing business
A business that buys raw materials and transforms them into financial products by using labor and machinery.
service business
Work that is done for others as an occupation or business.
sole proprietorship
A business owned by one person.
partnership
A business owned by two or more persons, called partners, who agree to operate the business as co-owners. .

29. Key Terms
corporation
A business organization recognized by law to have a life of its own.
charter
The legal permission, granted by a state, that gives a corporation certain rights and privileges and spells out the rules under which the corporation is to operate.
Subchapter S
A special form of corporation that allows the protection of limited liability but direct flow-through of profits and losses .

30. Sole Proprietorship
Sole means “single” and proprietor means “owner.” A sole proprietor is a single owner, but the operation may have many managers and employees. There are advantages and disadvantages to being a sole proprietor.

31. Advantages of the Sole Proprietorship
Simple to create
Least costly form to begin
Profit incentive
Total decision making authority
No special legal restrictions
Easy to discontinue
Ch, 5: Forms of Business Ownership

32. Liability Features of the Basic Forms of Ownership
Sole Proprietorship
Claims of Sole Proprietor’s Creditors
Sole Proprietor’s Personal Assets
Ch, 5: Forms of Business Ownership

33. Partnership
When two people enter into an agreement to operate a business as co-owners, a partnership is formed. There are advantages and disadvantages to a partnership.

34. Corporation
A corporation often starts off as a sole proprietorship or partnership. In order to become a corporation an organization must obtain a charter (legal permission to operate). There are advantages and disadvantages to a corporation.

36. Choosing a Form of Ownership
There is no one “best” form of ownership.
The best form of ownership depends on an entrepreneur’s particular situation.
Key: Understanding the characteristics of each form of ownership and how well they match an entrepreneur’s business and personal circumstances.
Ch, 5: Forms of Business Ownership

37. Business Description
Describe the business you are, or want to be, it should include
Form of Business
Specific product or service
Proposed location of the business
location
Existing potential customers, their geographic area: domestic, international
Brief history
How was or will the business be financed
Who are, or will be, the owners

38. Importance of Business Location
Critical to the success of a business.
Especially for retail businesses. What happens when you pick a poor location? Established business it is still necessary to check the suitability There is much to consider when deciding on the location of your business, including:
customer profile
transport
neighborhood
finances
the longer term future.
should not be a once-only decision.
Review your location at lease renewal and when establishing a new outlet.