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Starting a New Business Or…how to be an Entrepreneur and make a lot of money!

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Presentation on theme: "Starting a New Business Or…how to be an Entrepreneur and make a lot of money!"— Presentation transcript:

1 Starting a New Business Or…how to be an Entrepreneur and make a lot of money!

2 Why Support Business? Meet consumer demand Create jobs Spur economic growth

3 Sole Proprietorships “Business owned and managed by one person. Owner makes the profit and is responsible for debts. Advantages: Ease of start up and closing, few restrictions, full decision-making power and profits, individual taxation. Disadvantages: Unlimited liability, limited growth potential, limited life.

4 Businesses Organized as Partnerships Two or more owners own and operate a business together. They share profits and liability. Advantages: ease of start-up, few restrictions, shared decision-making power, specialization by partners, individual taxation, and increased growth potential Disadvantages: unlimited liability, conflict between partners, keeping continuity if a partner leaves

5 Businesses as Corporations Business owned by shareholders who have limited liability in the firm’s debts. It is a legal entity that can conduct business affairs in its own name (14 th Amendment) Advantages: limited liability, greater growth potential, professional management, and long life Disadvantages: complexity of start-up, loss of owner control, greater government regulation, tax on profits at the corporation and shareholder levels *Multinational corporation operates in more than one country *Public vs. Private corporations…

6 Franchises, Cooperatives, and Nonprofit Organizations Business Franchise: parent company (franchiser) grants to independent owner (franchisee) exclusive right to use trade name and sell products in designated location. Cooperative: business owned and operated by a group of individuals for shared benefit. Ex: credit unions, agricultural co-ops. Nonprofit Organization: functions like a business, but no profit. Supports a particular private or public goal.

7 Rights and Responsibilities of Business in Free Enterprise System? Many rights/responsibilities same as individuals – ex., taxes, free speech Ethics influences consumer decisions, i.e. Starbucks or Nike  Ethical vs. Legal?

8 Important Vocabulary Sole proprietorship Liability Partnership Corporation Multinational corporation Business franchise Cooperative Nonprofit organization


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