1 / 28

Business Organization in the U.S. Economy

Explore forms of business ownership, organizational structures, and activities like idea generation, employing personnel, and marketing goods. Learn about types of businesses, ownership, and key terms in the business world.

msmart
Download Presentation

Business Organization in the U.S. Economy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BUSINESS ORGANIZATION Business in the U.S. Economy Forms of Business Ownership Organizational Structure for Businesses

  2. Contingent worker- employee with no long term obligation (short term or temporary worker)PERCENT OF BUSINESSES BY EMPLOYEE SIZE

  3. BUSINESS ACTIVITIES • Generating ideas • Raising capital • Employing and training personnel • Buying goods and services • Marketing goods and services • Maintaining business records

  4. TYPES OF BUSINESSES • Producer- Create products and services Example: Extractor, Farmer, manufacturers • Intermediaries- Selling goods & services Example: Retail clothing store, COSTCO • Service business- Offer something intangible Example: Dentist, Teacher

  5. 3 TYPES OF BUSINESS OWNERSHIP • Sole Proprietorship- 1 owner Example: Duncan’s Landscape (small business) • Partnership- 2 or more owners Example: Law office of Smith & Williams • Corporation- A legal entity where the owners are shareholders (stock ownership) Example: Apple, Wal-Mart

  6. 3 TYPES OF BUSINESS OWNERSHIP Sole Proprietorship- Unlimited Liability- Owner is 100% responsible for the business Partnership- Partnership Agreement- Legal Document that defines the details of each partner Corporation- Articles of Incorporation- Legal documents that defines the details of the corporation. Stock- shares of ownership in a corporation Limited Liability- The risk is limited to your investment.

  7. Forms of Ownership

  8. Checkpoint  • Which form of business ownership is the most complex and difficult to form? • The corporation is more complex to begin than other business forms. • Forming a corporation requires much more bureaucracy, is more subject to government regulations, requires the organization of a board, and must have clearly defined bylaws.

  9. OTHER FORMS OF OWNERSHIP • Franchise- a chain business that you can purchase for a fee. Any 3 of the ownerships can invest in a franchise EXAMPLE: McDonalds, Sport Clips,

  10. Checkpoint  • What are the other specialized forms of business ownership? • Limited liability partnership • Joint venture • S corporation • Limited liability company (LLC) • Nonprofit corporation

  11. KEY TERMS • Mission Statement- a written objective of the company’s goals and vision • Goal- the objective, what are you wanting to accomplish • Policies- rules of the business • Procedures- methods of activities that support the mission statement and goals. • Organization chart- chain of command chart, who is in charge of who and what

  12. BUSINESS ORGANIZATION CHART

  13. (3 types of ownership, advantages/ disadvantages/legal documents)Sole ProprietorshipAdvantage- 100% profit, easy to startDisadvantage- 100% liability & risk, long hoursLegal Docs: Assumed Name Certificate, SS# or Tax IDPartnershipAdvantage- shared responsibility and riskDisadvantage- shared profitsLegal Docs: Partnership Agreement, Tax IDCorporation-Advantage – limited liability, more resourcesDisadvantage- double taxation, limited profitsLegal Docs: Corporate Resolution, Articles of Incorporation, Tax ID

  14. Page 2A & 2B (ONLINE RESEARCH)FRANCHISE RESEARCH (2)www.entrepreneur.com/franchiseCORPORATION RESEARCH

  15. Entrepreneurship and Small Business Management Becoming an Entrepreneur Small Business Basics Starting a Small Business

  16. KEY TERMS • Entrepreneur- the individual that is a risk taker and innovator. • Entrepreneurship- the business that is creative and risky. • Characteristics: Creative, confident, goal-oriented, motivated, hard-working • Risks: Unproven idea, little management experience, long-hours with no guarantee of a profit

  17. KEY TERMS • Venture Capital- Money provided by large investors to finance new products and new businesses that have a good chance to be very profitable *Innovation- a brand new creation or invention *Improvements- a significant design change or addition on an existing product

  18. Small Business- a business with less than 500 employees (typically just a few people) • Not all business owners and managers are entrepreneurs. • Entrepreneurs have unique skills and personal characteristics. • 3 CHARACTERISTICS OF A SMALL BUSINESS: The owner is usually the manager Usually only 1 or 2 locations Typically serves a small market

  19. 3 Reasons most small businesses fail • Lack of money • Lack of management experience • Not keeping adequate records

  20. Employment Growth by Business Size, 1990–2005

  21. Checkpoint  • What are the sources of financing that entrepreneurs use for their new businesses? • Personal savings • Friends and family • Venture capital • Bank loans

  22. KEY TERMS • Small Business Administration (SBA)- a government agency that helps small business owners develop business plans and obtain financing

  23. Common Types of Small Businesses as Percent of All Small Businesses

  24. BUSINESS PLAN Business Plan- a written description of the business idea and how it will be carried out. 5 ELEMENTS 1)Description of the business & goals 2)Customer Analysis- knowing your customer 3)Operations Plan- organizing the business 4)Marketing Plan- marketing & advertising 5)Financial Plan- Creating a Budget: start up, short term & long term

  25. Checkpoint  • What are the “strategic alternatives” in a business plan? • Strategic alternatives are alternative plans for production, staffing, financing, and so on. • Even the best business plan cannot predict every possible circumstance. • An alternate plan allows a business to be prepared for the unforeseeable.

  26. FINANCING THE SMALL BUSINESS • Types of financing • Start-up financing- the money and details of getting the business started: inventory, supplies • Short-term financing- the money needed for the first year of expenses • Long-term financing- a 3-5 year plan of success for the business, identify long term financial needs.

  27. Checkpoint  • In addition to owner-supplied capital, what are several other sources of financing for a small business? • Borrowed money may come from banks, finance companies, or other individuals, such as friends and family. • Some suppliers may also be willing to extend credit.

  28. Entrepreneur- ONLINE RESEARCH • WHO INSPIRES YOU? • WHAT IDEAS INSPIRE YOU?

More Related