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Bell Ringer

Bell Ringer. Entrepreneurship - the process of starting and managing your own business. ---Write a list of what you would consider to be the advantages and disadvantages of entrepreneurship. Chapter 37. What is Entrepreneurship?. Objectives. Identify the meaning of entrepreneurship

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Bell Ringer

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  1. Bell Ringer Entrepreneurship- the process of starting and managing your own business. ---Write a list of what you would consider to be the advantages and disadvantages of entrepreneurship.

  2. Chapter 37 What is Entrepreneurship?

  3. Objectives • Identify the meaning of entrepreneurship • Discuss how to identify the risks involved in entrepreneurship • Identify advantages and disadvantages of entrepreneurship • Discuss how to identify the personal characteristics and skills necessary for entrepreneurs.

  4. Objectives Cont… • Identify how to discuss business ownership opportunities. • Identify forms of business ownership • Identify the legal steps to take in establishing a business.

  5. What is Entrepreneurship? • Entrepreneurship- the process of starting and managing your own business • Entrepreneurs- people who organize, manage, and take the risk of owning and operating a business.

  6. The Risk of Entrepreneurship • Commitment of time, money, and effort • You must be a risk-taker • Often must quit a job • Long Hours • Invest savings and borrow $ • NO GUARANTEES!!!

  7. Advantages of Entrepreneurship • Personal freedom • Personal satisfaction • Increased income • Increased self-esteem • Set your own work schedule and control your own fate

  8. Disadvantages of Entrepreneurship • Potential loss of income • Long and irregular hours • Necessity for strong self-discipline

  9. Personal Characteristics forSuccessful Entrepreneurship • Strong organizational skills • Tremendous drive • Good Leadership Ability • Possess special skills and knowledge necessary to operate the business • Good physical and mental condition.

  10. Do You Have What it Takes?

  11. Do You Have What it Takes? • Answering “yes” to most or all of the questions should be an indication that you may have the right characteristics for success. You should also consider the experiences of family, friends, and other businesspeople who are in the same or a similar business. Find out about their experiences. Do research on the type of business you want to start. All this information taken together should give you a good indication of whether you are ready and able to join the millions of small business owners in the U.S.

  12. The Importance of Entrepreneurship in Our Economy • Small businesses: • Make up the majority of U.S. businesses. • Provide jobs for about 55% of the labor force. • 80% of new jobs created annually come from businesses less than 5 yrs. old. • Produce 50% of the GDP

  13. Business Ownership Opportunities • 150,000 businesses are started each year. • 4 ways to enter a business: • Develop a new business • Purchase a franchise • Purchase an existing non-franchise business • Take over the family business

  14. Business Ownership Opportunities Cont… • Franchise- an agreement to operate a business in the name of a recognized company

  15. Forms of Business Organization • Sole Proprietorship • Partnership • Corporation

  16. Forms of Business Ownership:Sole Proprietorship • Sole Proprietorship- a business owned and operated by one person • Most common form of business ownership • 70% of all U.S. businesses

  17. Advantages Easy to start All decisions made on your own Taxed less than other forms of businesses More freedom from gov’t regulation Disadvantages Responsible for all debts or legal judgments Unlimited Liability- In the event that the debts of your business exceed its assets, your creditors can claim all of your own personal assets, such as your car, home, and savings. Sole Proprietorship

  18. Forms of Business Ownership: The Partnership • Partnership- a legal agreement between two or more people to be jointly responsible for the success or failure of a business. • Least common form of U.S. business • 10% of U.S. businesses

  19. Types of Partnerships • General partnership- each partner shares in the profits and losses. Each partner has unlimited liability for the company’s debts. Each partner’s share of the profits is taxed as personal income. • Limited Partnership- each limited partner is liable for any debts only up to the amount of his or her investment in the company

  20. Advantages: Combines the skills of the owners Offer more money Easier operation and expansion Each partner gets a voice in mgmt Taxed and regulated less heavily than a corporation. Disadvantages: Owners may not always agree on business decisions All partners assume share of the business debt. Responsible for the shares of other partners if they cannot pay Business dissolves if 1 partner dies. Partnership

  21. Forms of Business Ownership: The Corporation • Corporation- a business that is chartered by a state and legally operates apart from the owner or owners. • Most complicated form of business

  22. Corporations • Stockholders- the people who actually own the corporation with limited liability. • Corporations can be incorporated, or established in the state where they will do business or in another state.

  23. Corporations cont… • Foreign corporation- incorporated under the laws of a different state from the one in which it does business • Must seek approval from and register with each state in which they intend to do business • Subchapter S corporation- small business that is taxed like a partnership or proprietorship

  24. Advantages: Each owner has limited liability Easier to raise $ for expansion than other forms Easy to enter or leave the business by selling or buying shares of stock Each operation area can be managed by an expert in that area. Disadvantages: Complexity of forming it Increased gov’t regulation Higher taxes on the profits of the corporation and on each stockholder Intricate accounting and record keeping Corporations cont…

  25. Sole Proprietorship or Partnership: You must file for a DBA (Doing Business As) DBA- a registration process by which your county gov’t officially recognizes that your business exists. Corporation You must file Articles of Incorporation, which identify the name and address of your business, its purpose, the names of the initial directors, and the amount of stock that will be issued to each director. Legal Steps in Establishing Your Business

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