1. WAYS TO ORGANIZE A BUSINESS Types of Businesses SOLE PROPRIETORSHIPS PARTNERSHIPS CORPORATIONS PERCENTAGE OF FIRMS 75% 8% 18%

2. PERCENTAGE OF SALES SOLE PROPRIETORSHIPS PARTNERSHIPS CORPORATIONS 6% 4% 90%

3. Sole Proprietorships Advantages Easy to form Keep all the profit Own boss Pride of ownership Disadvantages Unlimited liability Limited life Bear all the costs Limited growth potential

4. Partnerships Advantages Access to more financial capital Specialization Share costs Share the work Disadvantages Limited life Unlimited liability (not always) Disagreements Different goals Share profits

5. Corporations Advantages Access to lots of capital Limited liability Unlimited life Money earning money Disadvantages Double taxation No sense of ownership Management is separate from ownership

6. Corporation The house the Marlboro Man built, Altria Group (formerly Philip Morris Companies), is the world's largest tobacco firm. Altria operates its cigarette business through subsidiaries Philip Morris USA and Philip Morris International, which sell Marlboro -- the world's best- selling cigarette brand since 1972. The company controls about half of the US tobacco market. However, tobacco is only part of its portfolio. It owns 85% of Kraft Foods, the world's #2 food company (after Nestlé), which makes Jell-O, Kool-Aid, Maxwell House, Oscar Mayer, and Post. The tobacco giant bought Nabisco in late 2000, folding it into Kraft. Altria owns 33.9% of SABMiller plc.businessPhilip Morris USAPhilip Morris InternationalKraft FoodsNestléSABMiller plc

7. FORTUNE 500 2007: Full List 1-100

8. List of billionaires (2007) - Wikipedia, the free encyclopediaList of billionaires (2007) - Wikipedia, the free encyclopedia

9. Advantage or Disadvantage? Which Business Type? Limited Liability Advantage of corporation Easy to transfer ownership Advantage of corp Limited Life Disadvantage of Sole and Part Unlimited Liability Disadvantage of Sole and Part More difficult and costly to organize Disadvantage of Corp Share expenses Advantage of Part Easiest to organize Advantage of Sole Faced with double taxation Disadvantage of Corp Management is separate from ownership Advantage of Corp Unlimited Life Advantage of Corp Potential loss of ownership by the founders Disadvantage of Corp

10. OTHER BUSINESS ORGANS (organizations) Businesses that provide a good or service without seeking a profit A business contract in which a company agrees to let another person establish an enterprise using its name Non-Profit Organization Franchise

11. DQ Grill & Chill® Restaurant Initial franchise fee is $35,000. (fees include training program and opening and support services) Franchise fee for additional store development is $25,000 Royalties are 4% of sales Sales promotion fees 5% - 6% of sales Franchise Agreement is 20 years Basic requirements for new franchisees –review of your background –review of work history –prior retail or foodservice ownership or management experience –a proposed management plan –financial resources necessary to develop and operate the unit

12. A business that is owned by the people who use its services A company that retains its corporate identity after being bought by another company Cooperative (co-op) ex. Credit union Subsidiary

13. YUM! Brands, Inc. operates as a quick service restaurant company. It develops, operates, franchises, and licenses a system of restaurants, which prepare, package, and sell various priced food items. The company operates various restaurant brands, including KFC, Pizza Hut, Taco Bell, Long John Silver's, and A&W All-American Food Restaurants. Its restaurants specialize in chicken, pizza, Mexican-style food, and quick-service seafood categories. As of December 31, 2006, it operated approximately 34,000 restaurants in 100 countries and territories. The company was founded in 1997. It was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM! Brands, Inc. in 2002. YUM! Brands, Inc. is headquartered in Louisville, Kentucky.

14. MERGER MANIA HORIZONTAL: 2 or more firms in the same market with the same good or service VERTICAL: 2 or more in different stages of producing the same good or service CONGLOMERATE: firms buy other companies that produce totally unrelated goods or services

15. EXAMPLES McDonalds buys Burger King McDonalds buys a horse farm Steel company buys an iron ore mine Steel company buys a shipping line Tobacco company buys a cereal company Cingular buys AT&T Horizontal Vertical (kidding) Vertical Conglomerate Horizontal