chapter 8: business organizations section 1: sole proprietorships
TRANSCRIPT
UNIT 4: BUSINESS
AND LABORChapter 8:
Business Organizations
Section 1:
Sole Proprietorships
INTRODUCTION Business Organization
Who owns the business?How do the owners work together?How is the business run?
Who makes the final decisions? Who pays the bills? Who gets the profits?
Business organizationis the structure whichruns a company.
SOLE PROPRIETORSHIPS Who owns the business?
A SINGLE (sole) individual
Who runs the business? A SINGLE (sole) individual
Who controls all of the business profits? A SINGLE (sole) individual
Who is responsible for all of the debts?A SINGLE (sole) individual
SOLE PROPRIETORSHIPS Most of American businesses are sole
proprietorships. However, they only generate 4% of all
US sales.
What can you guess about sole proprietorships based on the statements
above?
SOLE PROPRIETORSHIPS Entrepreneurial Spirit
Work for someone else?
Work for MYSELF!Required Characteristics
Ambitious Risk-taker Organized Responsible Energetic Goal-oriented Business-smart
SOLE PROPRIETORSHIP Benefits!
Easy to start-up Small legal expense Little paperwork
Business license From local government Perhaps state certifications
Occupancy certificateName registration
SOLE PROPRIETORSHIP Benefits!
Few regulations (compared to other business organizations)
Receive all of the PROFITS!!!!Total control
SOLE PROPRIETORSHIP Disadvantages
Unlimited PERSONAL liability You are responsible (liable) for all costs –
including lawsuits! Liability includes your PERSONAL property
SOLE PROPRIETORSHIP Disadvantages
Limited access to resources MONEY to start-up or expand comes from YOU Limited skills Limited time
Lack of permanence If the owner dies or retires Workers leave because of limited fringe benefits
SOLE PROPRIETORSHIP Summary:
SOLE PROPRIETORSHIPYour Turn:
1. Create a “T-Chart” which lists at least THREE advantages and THREE disadvantages
of sole proprietorships.2. Place a STAR next to the MOST
important one (your opinion)in each column.
Advantages
Disadvantages
1 ~~2 ~~3 ~~
1 ~~2 ~~3 ~~
Sole Proprietorships