1. Chapter 8 business ownership & entrepreneurship
Section 8.1 Page 184
TYPES OF BUSINESS OWNERSHIP

2. HAVE YOU EVER THOUGHT OF OPENING YOUR OWN BUSINESS
HAVE YOU EVER THOUGHT OF OPENING YOUR OWN BUSINESS? woULD YOU KNOW HOW TO COMPLY WITH LEGAL REQUIREMENTS?

3. Let’s examine several types of business ownership
SOLE PROPRIETORSHIP – Is a type of business ownership in which one person owns the business 80% of all businesses in the US consist of Sole Proprietorships
Advantages:
Be your own boss.
Relatively easy to start form
Limited paperwork
Fewer regulations
All profits get taxed personally
Disadvantages:
Unlimited liability
Business owner fully responsible
Owners personal assets liable

4. Partnership – a type of business ownership in which 2 or more people own the business
Partners share the risks and rewards
Advantages:
Each partner can bring different skills
More capital to expand with 2 or more partners
Disadvantages:
Breaking up the partnership can be difficult.
Each partner is liable for the debts and injuries caused by the business
Unlimited liability

5. Corporation- a TYPE OF BUSINESS OWNERSHIP IN WHICH MANY PEOPLE, WHOM THE LAW TREATS AS ONE PERSON, OWN THE BUSINESS
Closely held = owned by a small group of people
Publicly held – sells shares on the stock market
Corporation pays taxes on profits
Ownership if based on amount of shares owned
Each corporation must have a set of officers or board of directors that meet at least once a year.

6. ADVANTAGES VS DISADVANTAGES OF A CORPORATION
Limited liability
Stockholders can buy more shares or sell shares.
Stocks can be issued in order to collect capital to expand
DISADVANTAGES:
Costly to start up
Require a lot of paperwork
Double taxation
Dividend tax to owners

7. SUBCHAPTER S CORP – is a corporation that is taxed like a partnership
SUBCHAPTER S CORP – is a corporation that is taxed like a partnership. It is not a taxpaying entity like a corporation, however it has some of the benefits of a corporation.
LLC – limited liability company – is a company whose owners and managers enjoy limited liability and some tax benefits.
MNC – multinational corporations – is an organization that operates in more than one country. Some examples include Nestle’, Exxon, Ford, IBM, Honda, Hyundai, and Toyota.
BUSINESS TYPES VIDEOS

8. Mode of entry- IS THE METHOD A COMPANY USES TO SELL PRODUCTS IN ANOTHER COUNTRY.
Indirect Exporting – managed by independent companies that handle exported goods for other countries.
Direct Exporting – company exports its own goods and services.
Turnkey Projects – A company builds, designs, and starts up a business in another country, then sells the plant to a local company. Take a look and J&J example on pg. 189
Licensing- A company transfers the rights and grants permission to produce and sell it’s products overseas to a foreign firm. As a payment the licensing company receives a fee or royalty from the firm.
Video :

9. ModeS of entry CONTINUED
Franchising – A company (franchisor) sells a franchise, the purchaser (franchisee) agrees to use the brand name and to follow the standards and rules set up by the parent company.
Joint Ventures – An agreement between 2 or more companies to work on a business venture.
Example: GM + Toyota work together to make smaller more economical cars.
Strategic Alliances – cooperative agreement between competitors or potential competitors from different countries.
Video:

10. Create your own strategic alliance
Think of a few companies that you are familiar with and create a model strategic alliance between them.
1.) What will the alliance accomplish?
2.) What makes them the perfect pair?
3.) What does each company bring to the table as a skill or benefit?
4.) What will be the outcome or goal of the alliance?
Write down your responses.

11. SECTION 8.2 ENTREPRENEURSHIP PAGE 193
Let’s begin with a common misconception:
Entrepreneurship is the process of starting a new business
Entrepreneur is a person who starts a new business
Intrapreneurship – starting a business that is spun off from an existing business.
Example: NBC created CNBC and MSNBC
Lets name a few notable ones…………………………………..
Complete your sheets with the Advantages vs. Disadvantages

12. Advantages Innovation Self direction Self reliance Flexibility
Profit potential
Be your own boss
Fullfillment

13. Disadvantages Long hours Consuming your personal life Responsibility
Financial risk
Start up funds

14. Global entrepreneurship
The process of selling new products, starting a new operating division, or starting up a new company in another country.
Ability to Compete:
Country Level
Industry Level
Company Level
Product Level

15. Benefits of going global
Enter new markets
Reach a new audience
Seasonal sales such as swimwear
Increase sales
Dump older products

16. RISKS OF GOING GLOBAL Political Risk Economic Risk Time Risk
Product Risk
Financial Risk

17. Video links