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Types of Businesses. Economics Unit 3. I. Entrepreneurs. A. Entrepreneurs Are The Individuals Who Take A Risk In Order To Create Or Improve A Business B. Examples Of Entrepreneurs Are Bill Gates/Microsoft, Henry Ford/ Ford Motor Company And Ray Kroc/ McDonalds

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Types of businesses

Types of Businesses

Economics Unit 3

I entrepreneurs
I. Entrepreneurs

A. Entrepreneurs Are The Individuals Who Take A Risk In Order To Create Or Improve A Business

B. Examples Of Entrepreneurs Are Bill Gates/Microsoft, Henry Ford/ Ford Motor Company And Ray Kroc/ McDonalds

C. Entrepreneurs Are Individuals Who Fuel The Economy

Entrepreneurs continued
Entrepreneurs (continued)

D. There are many ways entrepreneurs get started

1. They get started at an early age

a. Start a small company in high school or college

b. Ex. Microsoft or landscaping

2. They develop and sell ordinary products

a. They create new products that you use every day

b. Ex. Cleaners, ball point pens etc.

Entrepreneurs continued1
Entrepreneurs (continued)

3. Entrepreneurs find new ways to sell their products

a. They find a new way to reach customers

b. Ex home Shows E-bay/ online stores and door-to-door sales

4. Entrepreneurs spot new markets and develop new products

a. They see a need and find a way to meet that need

b. Ex. IRF inventory scanners, Kinkos copy centers

5. Entrepreneurs improve current markets/ products

a. Find a better or more efficient way to do business

b. Improve a product

c. Ex. Fed Ex/ US Postal Service

Entrepreneurs continued2
Entrepreneurs (continued)

E. Entrepreneurs use a lot of strategies

1. They watch for changes in markets to see what people like and don’t like

2. Provide alternatives that compete with other companies

3. Sometimes they just get lucky and opportunities just happen

Ii types of businesses
II. Types of Businesses

A. E-commerce

1. Business that sells goods and services over the internet

2. Ex. E-bay and Amazon

Types of businesses continued
Types of Businesses (continued)

A. Small business

1. Usually are service related

2. This is how most businesses usually start

3. Small Businesses have many advantages

a. They can change and adapt quicker than corporations

b. They are market specific (They focus on a part of the market)

c. Customers feel that small businesses are more personnel

d. Quality usually is better

Types of businesses continued1
Types of Businesses (continued)

4. Problems and disadvantages

a. Managing a business can be tougher that starting one

b. Most businesses close due to not enough money coming in (They are affected more by hard times)

c. Very costly to find and hire qualified employees

Types of businesses continued2
Types of Businesses (continued)

B. Sole-proprietorship

1. One person owns it

2. Most common type of small business

3. Advantages

a. Be your own boss- you can own and run it

b. Owner gets all of the profit

c. Flexibility- You get to set your own hours and react to businesses demands

Types of businesses continued3
Types of Businesses (continued)

4. Problems and disadvantages

a. Businesses owners can literally lose everything if it fails

b. You only have your own money and assets to invest

c. The business usually dies with the owner unless it can be passed on to someone

d. Very tough to keep employees since position advancement is limited

Types of businesses continued4
Types of Businesses (continued)

C. Partnership

1.Owned by two or more people

2.Business responsibilities and profits are shared

3.Least common type of business


a. Variety of ways to be organized

b. More money can be invested

c. Two heads are better than one

Types of businesses continued5
Types of Businesses (continued)

5. Problems and disadvantages

a. Partners can lose everything if the business fails

b. If a partner quits or dies, a new partnership must be formed

c. Company resources are limited to the partners’ funds

d. Disagreements can happen between partners

Types of businesses continued6
Types of Businesses (continued)

D. Corporations

1. Ran on behalf of stockholders

2. Need special charter from the state to be able to start

3. A corporation is treated like a person in court

4. Organization

a. Stock-Holders

- Buy stock/ ownership in a company

- Stock is sold to fund a company’s start up or expansion

b. Board of Directors

- Run the company

- Voted by the stock holders

Types of businesses continued7
Types of Businesses (continued)

5. Advantages

a. Investors can only lose what they have invested

b. If you don’t want to be bothered with a company anymore, you just sell the stock

c. A corporation can out-live the owners

d. Can raise money by selling stock and bonds

- Stock- shares in the ownership of a company

- Bond- Corporation or government issued certificate that shows indebtedness to the holder

Types of businesses continued8
Types of Businesses (continued)

6. Disadvantages

a. Very expensive and complicated to run (usually need a lawyer’s help)

b. Taxed twice (Company profits and stock earnings)

c. Strict Regulations are involved

Iii special types of businesses
III. Special Types of Businesses

A. Not-for-profit corporations

1. Don’t pay taxes since their not making any profit

2. Ex. Red Cross

B. Government owned corporations

1. Result of lack in the market

2. The local, state and national governments run these businesses

3. Ex. US postal service, septa, penndot and deldot

Special types of businesses continued
Special Types of Businesses(continued)

C. Franchise

1. Small business that is given a license to open in the name of a company

2. Ex. Chic-fil-a, McDonalds and KFC

3. Ran by a franchise owner but answers to the company owners