1. The Scope of Business Today Chapter 3

2. Business Size

3. Definition of Small Business Larger, more developed countries (U.S.) – Any company with 500 or fewer employees Larger, more developed countries (U.S.) – Any company with 500 or fewer employees Smaller, less developed countries – Any company with 100 or fewer employees Smaller, less developed countries – Any company with 100 or fewer employees

4. Largest Business

5. Top 10 Most Valuable Companies Fortune 500 List: http://www.pathfinder.com/fortune/fortune500/http://www.pathfinder.com/fortune/fortune500/

6. Why do Businesses get Large? Diversification – when a business is involved in more than one type of business activity Diversification – when a business is involved in more than one type of business activity Merger – occurs whenever two companies join to form a combined company Merger – occurs whenever two companies join to form a combined company Acquisition – occurs whenever one company buys another company Acquisition – occurs whenever one company buys another company

7. General Electric’s Businesses

8. Size of some US Corporations GDP (Gross Domestic Product) is defined as the total value of goods and services produced within a territory during a specified period regardless of ownership

9. Importance of Small Business Small businesses employee most of the US workforce Small businesses employee most of the US workforce In Hawai’i, chances are you will work in a small business In Hawai’i, chances are you will work in a small business Small businesses are responsible for most of the new innovations Small businesses are responsible for most of the new innovations

10. Entrepreneurship Each year in the US, 600,000 people start their own businesses Each year in the US, 600,000 people start their own businesses –Purchase of an existing small business –Development of a new small business –Purchase of a franchise –Family business Entrepreneurship is the act of starting, buying, or expanding a business Entrepreneurship is the act of starting, buying, or expanding a business

11. Forms of Business Ownership Sole Proprietorship – business owned by a single person Sole Proprietorship – business owned by a single person Partnership – business owned by two or more individuals Partnership – business owned by two or more individuals Corporation – a separate business entity owned by stockholders Corporation – a separate business entity owned by stockholders

12. Sole Proprietorship

13. Partnership Issues: Issues: –Working partners –Silent partners –Partnership agreement

14. Partnership

15. Corporation

16. Corporate Ownership Privately held corporation – a business that has a few stockholders and the stock is not open for public sale Privately held corporation – a business that has a few stockholders and the stock is not open for public sale Publicly held corporation – a business with stock that is open for public sale Publicly held corporation – a business with stock that is open for public sale *Stockholder – any person who owns at least one share in a corporation

17. Employee Ownership ESOP – employee stock ownership plan ESOP – employee stock ownership plan –Powerful motivator

18. Another form of Ownership One business owns another One business owns another Best Buy owns Musicland and Sam Goody Best Buy owns Musicland and Sam Goody Best Buy is the parent company and Sam Goody is a subsidiary Best Buy is the parent company and Sam Goody is a subsidiary