1. Unit 4: Business and Labor
Chapter 8:
Business Organizations
Section 1:
Sole Proprietorships

2. Introduction Business Organization
Who owns the business?
How do the owners work together?
How is the business run?
Who makes the final decisions?
Who pays the bills?
Who gets the profits?
Who is responsible if something goes wrong?
Business organization is the structure which
runs a company.

3. Sole proprietorships Who owns the business? Who runs the business?
A SINGLE (sole) individual
Who runs the business?
Who controls all of the business profits?
Who is responsible for all of the debts?

4. Sole Proprietorships
Most of American businesses are sole proprietorships.
However, they only generate 4% of all US sales.
What can you guess about sole proprietorships based on the statements above?

5. Sole Proprietorships Entrepreneurial Spirit Work for someone else?
Work for MYSELF!
Required Characteristics
Ambitious
Risk-taker
Organized
Responsible
Energetic
Goal-oriented
Business-smart

6. Sole Proprietorship Benefits! Easy to start-up Small legal expense
Little paperwork
Business license
From local government
Perhaps state certifications
Occupancy certificate
Name registration

7. Sole proprietorship Benefits! Few regulations
(compared to other business organizations)
Receive all of the PROFITS!!!!
Total control

8. Sole Proprietorship Disadvantages Unlimited PERSONAL liability
You are responsible (liable) for all costs –
including lawsuits!
Liability includes your PERSONAL property

9. Sole proprietorship Disadvantages Limited access to resources
MONEY to start-up or expand comes from YOU
Limited skills
Limited time
Lack of permanence
If the owner dies or retires
Workers leave because of limited fringe benefits

10. Sole proprietorship
Summary:

11. Sole proprietorship Your Turn: Create a “T-Chart” which lists at least
THREE advantages and
THREE disadvantages
of sole proprietorships.
Place a STAR next to the MOST
important one (your opinion)
in each column.
Sole Proprietorships
Advantages
Disadvantages
1 ~~
2 ~~
3 ~~
1 ~~
2 ~~
3 ~~