1. BUSINESS ESSENTIALS J.TURNER FORMS OF OWNERSHIP

2. SMALL BUSINESS Independent business with fewer than 500 employees 99.9% of ~26 million US businesses Responsible for 60-80% of all new jobs Owner = Manager One or few locations Small market Not dominant in field

3. © Prentice Hall, 2007Excellence in Business, 3e

4. SOLE PROPRIETORSHIP Owned by one person Easiest and least expensive Examples: Farms Retail establishments Small service businesses Home based businesses (caterer, consultant, computer programmers)

5. © Prentice Hall, 2007Excellence in Business, 3e Ease of establishment Self-satisfaction Privacy Tax advantages Unlimited liability Personal pressure Difficult to get funding Limited life Sole Proprietorship AdvantagesDisadvantages

7. © Prentice Hall, 2007Excellence in Business, 3eChapter 5 - 7 Easy to Establish Tax Advantages Strength in Numbers Diversity of Skills Extended Life Increased Capital Partnership Advantages

8. © Prentice Hall, 2007Excellence in Business, 3eChapter 5 - 8 PARTNERSHIP DISADVANTAGES Unlimited Liability Unlimited Liability Interpersonal Problems Interpersonal Problems Unproductive Partners Unproductive Partners Managing Partner Managing Partner Law Suits Debts

9. © Prentice Hall, 2007Excellence in Business, 3eChapter 5 - 9 CORPORATIONS Enter Into Contracts Buy and Sell Property Sue and Be Sued Face Limited Liability

10. © Prentice Hall, 2007Excellence in Business, 3eChapter 5 - 10 Corporations  Access to capital  Limited liability  Increased liquidity  Unlimited life span  Excess paperwork  Burdensome costs  Double taxation  Disclosure requirements AdvantagesDisadvantages

12. THE FRANCHISING ALTERNATIVE Product franchise Manufacturing franchise Business-format franchise ©2007 Prentice Hall 6-12

13. EVALUATING A FRANCHISE Initial franchise Periodic royalties Trademarks and names Advertising and promotion Business location Exclusive territory Right of first refusal Equipment and supplies Agreement termination Franchise agreement ©2007 Prentice Hall 6-13

14. PROS AND CONS OF FRANCHISING ©2007 Prentice Hall 6-14 Advantages  Get a viable business  Name recognition  Network of support  Blueprint for success Disadvantages  No guarantee of wealth  High monthly royalties  Limited independence  Limited flexibility

15. THE END!!