Objective 3.01: Factors Influencing Entrepreneurship. Entrepreneur. A person who assumes risk of starting and operating a business for the purpose of making a profit. Acquiring a Business…. 1. Take over a family business. Do you have the ability to work for a member of your family?
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Entrepreneur A person who assumes risk of starting and operating a business for the purpose of making a profit.
1. Take over a family business • Do you have the ability to work for a member of your family? • Do you get along with members of your family who will be involved with the business? • Do you share the same goals for the business? • Can you leave the business problems at work when you go home?
2. Buy an existing business • Good alternative if you do not have a great deal of business experience. • May be less risky as already established. • Will you keep the current name and location of business or change?
3. Start your own business • Do I have the motivation and persistence to start from “ground up”? • Do I have sufficient knowledge of basic operations to undertake the business in which I am interested? • Do I have enough financial resources to start from “ground up?”
Sole Proprietor Advantages Disadvantages Easy start up All profits to owner Little government regulation Direct control Held personally liable for debts and obligations of the business Responsible for liabilities committed by employees Difficulty in financing Limited life (death of owner usually equals death of business) All losses responsibility of owner
2. Partnership Two or more owners
Partnership Advantages Disadvantages Easy start-up Limited government regulations Shared financing and losses Unlimited liability Shared profits Limited life (death of partner may mean end of partnership) Shared control
3. Corporation • Owned by stockholders
Corporations Advantages Disadvantages Limited liability Ease in raising capital $$$$ Continuity of business Ownership is easily transferred Expensive to form Profits depend on investment Lack of control by owners High government regulation
4. Franchise • A business system in which private entrepreneurs purchase the rights to open and run a location of a larger company.
Franchise Advantages Disadvantages Established national name Reduced risk of failure Training provided Cost to purchase is high Additional fees for local advertising Percentage of sales goes to Franchiser Lack of freedom in running business