2.  When most people think about going into business they think about starting up their own business. But purchasing an existing business can be a good option. There are many ways to find businesses that are for sale. -Advertisements in the newspaper -Using a business broker who sells businesses for a living -Other people in the industry who may know of businesses for sale -Leasing agents -Lawyers and Bankers -Management Consultants or Small Business Administration

3. 1. The existing business already has the necessary equipment, suppliers, and procedures in place. 2. The seller of a business may train a new owner. 3. There are prior records of revenues, expenses, and profits. 4. Financial arrangements can be easier. 1. Many businesses are for sale because they are not making a profit. 2. Serious problems may be inherited. 3. Capital is required.

4.  Franchise-is a legal agreement that gives an individual the right to market a company’s product or services in a particular area.   There are more than 909,000 franchises operating in the United States, and the number is growing.

5. Jim Saurbrey purchased a Subway restaurant franchise. For the right to use the Subway name and logo, Jim paid a franchise fee of $15,000. In addition, Jim spent $70,000 renting restaurant space, purchasing equipment and supplies, and obtaining legal and accounting services. During its first year, Jim’s franchise earned $36,000 in profits. He paid 12.5 percent, or $4,500, to Subway in royalty fees (weekly or monthly payments made by the local owner to the franchise’s company) 8% and advertising fees (paid to the franchise company to support television, magazine, or other advertising of franchise as a whole) 4.5%. During Jim’s second year in business, his restaurant earned $51,000, and he paid $6,375 in royalty and advertising fees.

6. 1. An entrepreneur is provided with an established product or service. 2. Franchisors offer management, technical, and other assistance 3. Equipment and suppliers can be less expensive 4. A guarantee of consistency attracts customers 1. Franchise fees can be costly and cut down on profits. 2. Owners of franchise have less freedom to make decisions than other entrepreneurs. 3.Franchises are dependent on the performance of other franchises in the chain. 4. The franchise can terminate the franchise agreement.

7.  The U.S. economy is dominated by family businesses. According to some estimates, as many as 90 percent of all businesses, families own including the vast majority of small and medium-sized companies. Many large companies, such as Wal-Mart and the Ford Motor Company, continue to be owned largely by people who are related to the company founder.

8. 1. Pride and Sense of Mission 2. Enjoy the fact that the business has stayed within the family for generations 3. Enjoy working with relatives 4. Knowing it benefits the family 1. Family members hold senior positions; sometimes can mean poor family decisions are made. 2. Difficult to maintain good employees that are not family members 3. Family politics 4. Private life and business life is often blurred 5. Problems between family members

9.  Sole Proprietorship-a business that is owned exclusively by one person

10. 1. Government exercises little control 2. Can be established and run smoothly 3. Limited about of paperwork needed to be filled out 1. Can be difficult to raise money; normally the only one investing money 2. Bear the burden of all risks 3. Personal assets may be taken if money is lost

11. a business owned by two or more people

12. 1. You will not have to come up with all the capital alone 2. Losses will be shared by both partners 3. Strengths and weaknesses can be shared 4. Face little government regulation 1. Must share responsibilities and profits 2. Held liable for partners mistakes 3. Could end bitterly

13.  A partnership agreement is signed by both parties; the purpose of this agreement is to set down in writing the rights and responsibilities of each of the owners.

14. -a business that has the legal rights of a person but is independent of its owners

15. 1. Liability-amount owed to others; 2. Money can be raised by selling stock 3. Lenders are more willing to lend money to corporations than to sole proprietorships or partnerships 4. The main shareholder can change through the buying and selling of stock without disrupting the day-to-day business operations 1. Initial setup is more complicated 2. You will need the assistance of a lawyer; who will help you file articles of incorporation with the state official responsible for chartering, or registering, corporations 3. More detailed business plans 4. More costly 5. Double taxation