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By the end of this lesson you should: 1. Identify different types of businesses. 2. Can differentiate aspects of corporations, partnerships, franchises,

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Presentation on theme: "By the end of this lesson you should: 1. Identify different types of businesses. 2. Can differentiate aspects of corporations, partnerships, franchises,"— Presentation transcript:

1 By the end of this lesson you should: 1. Identify different types of businesses. 2. Can differentiate aspects of corporations, partnerships, franchises, and sole proprietorships. 3. Can assemble questions on these for review.

2  A Sole Proprietorship is the most common form of business.  It’s owned and controlled by ONE person.  It makes up 40% of all businesses in the U.S. https://www.youtube.com/watch?v=KY neLGRTgy8 Mark Cuban on starting your own business: Daymond John on starting your own business: https://www.youtube.com/watch?v=us Kz6WRvs3A

3 ADVANTAGESDISADVANTAGES  Easy to get started  Few regulations  Doesn’t have to share any profits  Doesn’t have to pay business income tax  Unlimited Liability  Difficulty to raise money  Limited life

4  Large Corporations offer FRINGE BENEFITS which makes it harder for small businesses to recruit and keep employees.

5 Total 2008 net income of the 22.5 million sole proprietorships amounted to 265 billion dollars. IRS statistics show that in 2008, the average annual net income of a sole proprietorship was only $12,000.

6  A business jointly owned by two or more people. ◦ HP Zuckerberg, Parker, Saverin (Facebook) Gates and Allen (Microsoft)

7 ADVANTAGESDISADVANTAGES  They bring in different ideas and different areas of expertise.  Access resources  Few regulations  Easy to open and close  Each partner is responsible for each other and how well the company does.  Limited life  Potential conflict between partners

8  A Corporation is a business owned by stockholders and is recognized by laws as a separate entity.  You need a LICENSE to form a corporation.  Stockholders are the owners of a corporation.

9  Stockholders purchase STOCKS to own part of the company.  If the company does well, stockholders may receive a DIVIDEND, part of the profit gained.

10  Public Company – a corporation that issues stock to be publically traded.  Private Company – owners control who can buy or sell its stock.  Two duties of the board of directors 1.Select a President 2.Keep shareholders informed

11 ADVANTAGES  Corporations have a lot of money. ◦ 18.2% of all corporations make more than $1 million  Has professional leadership. ◦ This allows for higher profits and greater growth.  Two other advantages are stable ownership and very responsible. http://thewaltdisneycompany.com/abou t-disney/leadership/board-of-directors

12 DISADVANTAGES  Corporations charters are hard to obtain because of START UP COSTS  Owners DO NOT have direct control over business decisions.  Corporations are subject to DOUBLE TAXATION!  Corporations are also subject to multiple REGULATIONS that smaller businesses are not. http://www.polleverywhere.com/multi ple_choice_polls/Jf5G8S28n1Od0L5 http://www.dos.ny.gov/corps/busguid e.html

13 Businesses would merge for two reasons 1. The desire for the business to become bigger. 2. Efficiency - Economies of Scale: the cost of production falls as producer grows.

14  A Horizontal Merger is combining two or more firms that produce the same kind of product or service.  A Vertical Merger is combining firms involved in different steps of manufacturing a good.

15  Conglomerates – a firm that has at least four businesses, each making unrelated products. GE

16  Multinational Corporations – a large corporation with branches in several countries. ◦ Multinationals helped developing nations by… ◦ Multinationals hurt workers in the U.S.

17  A Franchise is a business that licenses the right to SELL ITS products in a given area.  A franchisee is when a person buys the rights to sell the parent company’s products.

18 Four types of food franchises:  Fast Food – McDonalds, Burger King, Wendy’s  Pizzerias – Pizza Hut, Dominoes, Papa John’s  Ice Cream – Dairy Queen, Cold Stone…  Coffee – Tim Horton’s, Dunkin’s, Starbucks

19  A COOPERATIVE is a business operated for the shared benefit or the owners, who are also its customers. ◦ Associated Press (News Co-Op) ◦ Sunkist Growers (Farmers Co-Op) ◦ BJ’s (Consumer Co-Op)

20  Non-Profit Organizations acts like a business organization.  It’s purpose is usually to BENEFIT SOCIETY. ◦ Amnesty International ◦ Red Cross ◦ UNESCO ◦ Salvation Army


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