Chapter 4 SELECT A TYPE OF OWNERSHIP LESSONS

Chapter 4 SELECT A TYPE OF OWNERSHIP LESSONS 4. 1 Run an Existing Business 4. 2 Own a Franchise or Start a Business 4. 3 Choose the Legal Form of Your Business ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 4 2 Lesson 4. 1 RUN AN EXISTING BUSINESS GOALS n Identify the advantages and disadvantages of purchasing an existing business. n Explain the steps involved in buying a business. n Recognize the advantages and disadvantages of joining a family business. ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 4 3 Purchasing an Existing Business n There are many ways to find out which businesses are for sale. n. Advertisements in newspapers n. People in the industry (Word of Mouth) n. Use a business broker : person who sells businesses for a living ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

ADVANTAGES OF BUYING AN EXISTING BUSINESS Chapter 4 4 n The existing business already has customers, suppliers, and procedures. n The seller of a business may train a new owner. n There are prior records of revenues, expenses, and profits. n Financial arrangements can be easier. ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

DISADVANTAGES OF BUYING AN EXISTING BUSINESS Chapter 4 5 n Many businesses are for sale because they are not making a profit. n Serious problems may be inherited. n Capital is required. ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 4 6 STEPS TO PURCHASE A BUSINESS 1. Align your objectives with what’s for sale 2. Investigate specific opportunities. 3. Observe the company in action. 4. Review books for past 3 years. 5. Get all important info in writing & have a accountant & lawyer look at it 6. Finance options 7. Contact a valuator ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 4 7 ENTER A FAMILY BUSINESS n The US economy is dominated by family businesses. Approximately as many as 90 percent of all businesses are owned by families. ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 4 8 Advantages of a family business n The pride that comes with being a part of a family enterprise n Remains in the family n Working with Relatives n Efforts a benefiting others whom they care about ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 4 9 Disadvantages of a family business n Promotion may not be done on ability n Hard to retain good employees who are not part of the family n Distinction between business life and private life is blurred n What do you do when there is no family member to take over, or the designated doesn’t want it? ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 4 10 My crazy story ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 4 11 Independent Study n SECTION 4. 1 Worksheet ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING