Business Organization Survey Monkey https www surveymonkey com

Business Organization

Survey Monkey https: //www. surveymonkey. com/ s/3 SRZ 9 L 6

Have you ever thought about starting your own business? If you were your own boss, what type of business could you see yourself running 5, 10 , 15 years from now?

Sole Proprietorship A business owned and managed by a single individual. • 75% of all businesses • 6% of sales. • (67% make less than $25 k). • Examples- Bike shop, barber, gardener, bakery.

Sole Proprietorship Positive • • • Full control. Start-up costs low (business license). Relatively few regulations. Full receiver of profits. Taxation. Easy to discontinue.

Sole Proprietorship Negative • Unlimited liability. • Limited capital ($) for expansion. • Lack of permanence.

Partnerships A business organization owned by two or more persons. • 7% of all businesses. • 5% of all sales. *General v. Limited Partnerships or (LLP). • Examples- Doctor, Lawyer, Accountant.

Partnerships Positive • • • Low start-up costs Shared decision making. Specialization/complimentary qualities. Larger pool of assets = expansion. Taxation.

Partnerships Negative • Unlimited liability. • Potential for conflict.

Corporations A legal entity, or being, owned stockholders. • 20% of all businesses. • 90% of all sales. • Examples: Wells Fargo, UPS, Disney, Wal-Mart.

Corporations Positives • Limited liability. • Capital investment and expansion easy w/stock offering. • Stockholders do not carry responsibility for corporation’s actions. • Easy to raise money to purchase capital. • Long life.

Corporations Negative • Difficult and expense of start-up. • Double taxation. (Corporate and Individual) • Loss of Control = Stockholders. • More regulations.

Corporation Combinations 1. Horizontal Merger – The joining of two or more firms competing in the same market with the same good or service. 2. Vertical Merger – The joining of two or more firms involved in different stages of producing the good or service. 3. Conglomerate – The joining of companies that produce entirely different products. (Remember Sara Lee? )

Franchise A semiindependent business that pays fees to a parent company. • The franchisee is granted the exclusive right to sell a certain product or service in a given area. • Franchisee must pay royalties to parent company.

Franchise Positives • Built-in reputation/brand recognition. • Management and training support. • Standardized quality. • National advertising. • Buying power.

Franchise Negatives • High franchise/royalty fees • Strict operating standards. • Purchasing restrictions. • Limited product line.

Match the Characteristics • Unlimited Liability • Limited Liability for Investors • Articles of Partnership • Few Government Regulations • Must Issue Stock • Articles of Incorporation • Recognizable Brand • Long Work Hours • Stricter Regulations • Needs Accurate Tax & Employee Records • Use of Personal Savings and Investments • Board of Directors • Can Be a Hybrid • Lasts for a Fixed Period of Time (5 -30 years) • Life of Partnership Limited • Documents of Disclosure • Secure Financing More Easily • Quick Start Up • Complimentary Skills • Royalty Fees • Easy to Form

Becoming a Franchisee You are interested in owning a franchise, however you need to do your research before you invest. With a partner, you are going to find 2 franchises, compare and contrast the two different franchise opportunities, and decide which is best for you. • With a partner, go to. . . http: //www. entrepreneur. com/franchise 500/index. ht ml • Research 2 franchises. • Fill out the worksheet. • Decide which franchise is best for you.